Climate change is expected to exacerbate water scarcity in the agricultural sector, which is already a critical concern. This article investigates the reaction of farmers in California to drought and institutional interventions regarding the adoption of various irrigation technologies and changes in land use. The study employs a fixed effect regression model to analyze data from all 58 California counties from 2000-2020. The results reveal that the adoption of efficient irrigation technologies for all crop categories in the study area increases significantly under extreme or exceptional drought. Furthermore, the results indicate that moderate or severe and extreme or exceptional adversely affect harvested acres of forage crops. We do not find any impact on harvested acres for other crop categories. We find that the passage of the sustainable groundwater management act in 2014 is associated with increased adoption of efficient irrigation technology. Moreover, we find that the act has a negative impact on harvested acres of forage crops. The findings of this study extend the existing literature on farmers' responses to drought and institutional interventions and offer insights to policymakers and stakeholders for enhancing water resource management and agricultural sustainability.