California's 5-year drought has ended, even as its aftermath lingers. From 2012-2016 much or all of California was under severe drought conditions, with greatly diminished precipitation, snowpack, and streamflow and higher temperatures. Water shortages to forests, aquatic ecosystems, hydroelectric power plants, rural drinking water supplies, agriculture, and cities caused billions of dollars in economic losses, killed millions of forest trees, brought several fish species closer to extinction, and caused inconvenience and some expense to millions of households and businesses. The drought also brought innovations and improvements in water management, some of which will better prepare California for future droughts. This paper summarizes the magnitude and impacts of the 2012-2016 California drought. The paper then reviews innovations arising from the drought in the larger historical context of water management in California. Lessons for California and for modern drought management are then discussed. Droughts in modern, well-managed water systems serving globalized economies need not be economically catastrophic, but will always have impacts and challenges, particularly for native ecosystems. In California and every other water system, droughts usefully expose weaknesses and inadequate preparation in water management. In this regard for California, managers of ecosystems and small rural water supplies had the most to learn.