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The Bear River is driven by a highly variable, snow-driven montane ecosystem and flows through a drought-prone arid region of the western United States. It traverses three states, is diverted to store water in an ecologically unique natural lake, Bear Lake, and empties into the Great Salt Lake at the Bear River Migratory Bird Refuge. People in the Bear River Basin have come to anticipate droughts, building a legal, institutional, and engineered infrastructure to adapt to the watershed's hydrologic realities and historical legacies. Their ways of understanding linked vulnerabilities has led to what might appear as paradoxical outcomes: farmers with the most legally secure water rights are the most vulnerable to severe drought; managers at the federal Bear River Migratory Bird Refuge engage in wetland farming and make unlikely political alliances; and, increased agricultural irrigation efficiency in the Basin actually threatens the water supply of some wetlands. The rationality of locality is the key to understanding how people in the Bear River Basin have increased their adaptive capacity to droughts by recognizing their interdependencies. As the effects of climate change unfold, understanding social-ecological system linkages will be important for guiding future adaptations and enhancing resilience in ways that appropriately integrate localized ecosystem capacity and human needs.