Frequent and prolonged droughts challenge groundwater sustainability in California but managing aquifer recharge can help to partially offset groundwater overdraft. Here, we use managed aquifer recharge (MAR) to examine potential benefits of adding an artificial recharge facility downstream from California’s Lower American River Basin, in part to prepare for drought. We use a statewide hydroeconomic model, CALVIN, which integrates hydrology, the economics of water scarcity cost and operations, environmental flow requirements, and other operational constraints, and allocates water monthly to minimize total scarcity and operating costs. This study considers a recharge facility with unconstrained and constrained flows. The results show that adding a recharge facility increases groundwater storage, reduces groundwater overdraft, and increases hydropower without substantially impacting environmental flows. Further, artificial recharge adds economic benefits by (1) reducing the combined costs of water shortage and surface water storage and (2) by increasing hydropower revenue. This study provides a benchmark tool to evaluate the economic feasibility and water supply reliability impacts of artificial recharge in California.