Periodic droughts, projected to become more frequent and severe with climate change, present a significant planning challenge for California’s water agencies. This research examined approaches to reducing drought vulnerability, focusing on five water agencies on California’s north and central coast that rely on local and regional sources of water. Curtailing water use is the principal response to drought. In contrast, this project highlights an important but underutilized proactive adaptation to improve water supply security during drought: the development of locally based groundwater drought reserves. While this approach represents an obvious solution in principle, it is uncommon to find it in practice, and this research provides insight into (1) motivating factors, (2) legal barriers and opportunities, (3) tools, and (4) policy options to support increased drought resilience and the development of drought reserves.