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Aquifers provide a reliable freshwater source in arid and semiarid regions, where droughts are common and irrigated crops present significant water requirements, so intensive pumping is generally needed. Over-extraction leads to dropping water tables, which in turn threatens the survival of groundwater-dependent ecosystems and water supplies. This calls for strategies to channel hydrological, environmental, agricultural, political and social change. Based on the experience of the Mancha Occidental aquifer, Spain, this paper explores some of the complexities of managing groundwater, dealing with the long-term changes that intensive groundwater use has generated in the region. The Mancha experience shows how environmental conservation may drive social and economic change at the regional scale for periods spanning several decades. What makes this case study unique, however, is the combination of social and environmental conflicts, most of which stem from the prevalence of illegal water use, and their detrimental effect on Ramsar wetlands. The situation exposed a paradox, namely that subsidies for farmers to cut down on water use were actually detrimental to the welfare of groundwater-dependent ecosystems. The unexpected (and timely) occurrence of extreme rainfall events in recent times, after 40 years of ineffective management measures and sustained environmental degradation, enabled the aquifer and its associated wetlands to recover spectacularly to a near-pristine condition. As groundwater-dependent wetlands are highly sensitive ecosystems, it is concluded that it is up to society to decide how much environmental damage can be tolerated in exchange for the social and economic benefits of groundwater-based development.