This Article suggests concrete solutions to promote the development of robust water markets. It begins with a review of water transfers in the western United States and historical water use patterns that help illuminate the problem. It then considers opportunities for moving agricultural water to urban use by studying successful water transfer systems. To those who know water allocation law, it will come as no surprise that many of these systems have evolved in the context of special purpose water districts and mutual ditch companies. Since special purpose districts and mutual ditch companies provide well over one-half the water to water users in the West, focusing reform efforts on such agencies could be an efficient way to modernize water transfer law. The Article then derives lessons from these examples and concludes with a series of recommendations for reforming western water law in ways that will promote more sensible water management.