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The current Southwest drought is exceptional for its high temperatures and arguably the most severe in history. Coincidentally, there has been an increase in forest and woodland mortality due to fires and pathogenic outbreaks. Although the high temperatures and aridity are consistent with projected impacts of greenhouse warming, it is unclear whether the drought can be attributed to increased greenhouse gasses or is a product of natural climatic variability. Climate models indicate that the 21st century will be increasingly arid and droughts more severe and prolonged. Forest and woodland mortality due to fires and pathogens will increase. Demography and food security dictate that water demand in the Southwest will remain appreciable. If projected population growth is twinned with suburb-centered development, domestic demands will intensify. Meeting domestic demands through transference from agriculture presents concerns for rural sustainability and food security. Environmental concerns will limit additional transference from rivers. It is unlikely that traditional supply-side solutions such as more dams will securely meet demands at current per-capita levels. Significant savings in domestic usage can be realized through decreased applications of potable water to landscaping, but this is a small fraction of total regional water use, which is dominated by agriculture. Technical innovations, policy measures, and market-based solutions that increase supply and decrease water demand are all needed. Meeting 21st-century sustainability challenges in the Southwest will also require planning, cooperation, and integration that surpass 20th-century efforts in terms of geographic scope, jurisdictional breadth, multisectoral engagement, and the length of planning timelines.