Describes methods for improving water mgmt. during drought developed during a 4-year study. The methods were tested & refined in 4 filed studies in different parts of the country, in which teams of water managers & users worked together to reduce drought impacts. This report explains the procedure for coop. Fed.-state Drought Preparedness Studies, to indicate how these studies relate to the longstanding principles & guidance for Fed. water resources investigations, & to indicate the means of implementing conclusions arrived at in any given region. Tables.