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Methods of reallocating water are discussed, including water project redesign or reauthorization, voluntary sale or transfer of water rights (sale of total entitlement; fee title, permits, shares, and contract rights; lease for a set term; option to lease during emergencies; sharing rights during shortages; conservation offsets; exchanges; and contractual and regulatory priorities), and involuntary transfers of water rights. Legal and institutional factors influencing reallocation addressed include the following: transferability of water rights; rights to salvage water; acquisition, transaction, and treatment costs; origin and destination conditions; and access to transport facilities. Legal, economic, social, and political uncertainties relating to water marketing and examples of contemporary water rights transfers in the western United States are described. The following legal reforms to accommodate water marketing are reviewed: right to market salvaged water; storage, transfer, or exchange of recharge waters; access to storage and transport; redefinition and enforcement of water law provisions; removing consumptive-use requirements for states; allowing sale or lease of rights in federal projects; and removing territorial limits on water transfers. Includes 41 references.