Water management in arid urbanizing regions requires careful evaluation of the alternative strategies for supplying future demands and control of water quality. Mathematical models were formulated to study the interrelationships that exist among various institutional factors in order to delineate the requirements for implementing optimal policies. Two study areas were selected on which to test the utility of the models. Denver, Colorado, was chosen as an area representing conditions of water scarcity and increasingly stringent water quality standards. The Utah Lake drainage area in central Utah presented conditions where water quality management is necessary to insure the continued use of water in the downstream population center of the state. Together these models produce results useful in determining the optimal strategies for water management in arid urbanizing areas. (Author)