This paper examines intersectoral water allocation, in particular how cities secure water vis-à-vis rural users, and assesses the equity of this (re)allocation. We use the distribution theory of institutional change, and argue that urban water providers mobilize power resources (positional, financial and informational) to secure water. We adapt the Institutional Analysis and Development (IAD) framework to study this empirically, with case studies from India, Spain and the United States that centre around a large reservoir and its reoperation. Results show the importance of financing power in all cases, and also suggest that cities may lack the positional power needed to implement drinking water priorities. The ‘hybrid equity approach’ reveals the diversity of equity considerations on rural-to-urban water reallocation, both in terms of local perspectives and also regarding universal equity principles. Finally, it is fruitful to study power and equity together, as the former generally has profound distributional and procedural implications which are at the heart of equity.