Conventional wisdom often views the urban water sector as being among the more sensitive sectors in the arid U.S. Southwest. To test this assumption, the Climate Assessment Project for the Southwest analyzed the water budgets of five Arizona cities to determine how severe the impacts would be from the deepest one-, five-, and ten-year droughts on record. Case study sites for the analysis included the Phoenix Active Management Area, Tucson Active Management Area, Santa Cruz Active Management Area, and the Benson and Sierra Vista subwatersheds of the San Pedro River.