More efficient agricultural water use sounds uncontroversial. Due to increased agricultural efficiency, about 300,000 acre-feet 1 of water per year is made available and is being reallocated from the Imperial Irrigation District to Los Angeles, San Diego and Coachella. This increase in efficiency and transfer of conserved water, however, is predicted to cause a suite of environmental and public health harms as the region’s agricultural sump (the Salton Sea) shrinks. Southern Californian water politics are famously messy, contentious and high stakes. The State struggles with the need to increase its use efficiency and decrease its overall use of its allocation of Colorado River water that supplies Californian south coast cities and inland agriculture. Local, State and federal parties involved in these water allocation decisions conflict over how to mitigate the externalities as there is no clear assignment of liabilities. This case study uses historical documents and recent policy elite interviews to construct a broad understanding of the nature of the dilemma. By engaging with this case, readers will better understand the relative positions of the rural water supplier and the urban water users in the largest water transfer in US history, and understand that increasing use efficiency in one arena—agriculture—does not always work out best for the environment.