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When a drought hits, which water system best survives the crisis: the system that relies on short-term restrictions or the one that has planned ahead and instituted conservation measures before the drought's onset? This article looks at the various factors that complicate the relationship between water conservation and drought. These include baseline water-use patterns, system growth rates, water supplies and water rights, storage capacity, and the nature of the drought itself. A mathematical model was used to simulate a 25-year history for a "typical" water system serving an average community of residential customers. Total annual household use was calculated, as well as annual average indoor use and outdoor use. The model also assigned a system supply level and storage capacity. In the ninth year of its "history," the community experiences the onset of what eventually becomes a long-term drought. The model generates two scenarios in response to this event. In the first, the water provider is unprepared for the drought and relies on restrictions to make up for dwindling supplies. In the second, system managers begin adopting conservation measures in the first year of the community's history and continue implementing them gradually. By the time the drought hits, water use has been reduced sufficiently enough that the system is able to successfully weather the crisis. In most cases, a long-range water conservation and efficiency program will outperform water rationing and restrictions as a response to drought. Includes table, figures.