The fair and wise allocation of the water supply in light of increasing, competing demands is one of the greatest challenges facing the Minnesota Department of Natural Resources (DNR). Withdrawals for public water supplies, domestic uses, irrigation, industrial processing, or power production can conflict with the need to maintain adequate streamflows and water levels for recreation, fish and wildlife habitat, and reliable ground water supplies. A significant increase in the amount of water available for competing needs is not feasible. Therefore, expectations for future water use and demands must be managed using sound water resource information and a profound understanding of the relationship between human activities and natural conditions. Included in this report are discussions of the following key topics: current water budget and human impacts; an overview of water resource management concerns that are being addressed statewide and by geographic and hydrogeologic areas; and current strategies for water supply management, and planning and development suggestions.