Reservoir reoperation is analysed from the perspective of institutions (rules) governing water resources. A new definition is provided, going beyond ‘modifying dam operations' found in the literature to instead focus on changes to the allocation of water stored and released from a reservoir. Through interviews and archival research, we assess 32 large reservoirs in the US state of Colorado. Using tools from institutional analysis, we find that reoperation is often the result of institutional ‘crafting' by reservoir managers and water users, that property rights strongly influence outcomes, and that well-designed policy can promote water sharing in otherwise rigid institutional settings.