The effective management of water resources is assuming enormous importance in India in the recent years. Sound water resource use is crucial for sustaining and raising food production, increasing rural incomes, alleviating poverty, and meeting drinking water as well as other human and industrial needs. It is now widely recognized that apart from engineering feats, good institutional arrangements are crucial for the sound management of the resource. In light of this, the development of water institutions has been taken up in India, but remains a major weakness. Existing water institutions are found to be lacking on various counts, and one of the critical deficiencies identified is the lack of adaptiveness to the significantly varying resource status, the temporal and spatial variation in availability and needs, and the different socio-economic settings. As a result, institutional failures are common and lead to poor management of the resource. This research has undertaken an in-depth examination of the issue of adaptiveness in the local water resource management institutions in India, exploring the status of its existence in the present institutions, the nature of its need, and the impact better adaptiveness has on performance and sustainability. The research is based on a survey of 464 households across a sample of 22 water institutions in three different states. It explores the relationship of adaptiveness to institutional structure, institutional processes and institutional governance and models the association of these and other factors to various measures of performance of the institutions.