Many international efforts have been made to encourage integrated water resources management through recommendations from both the academic and the aid and development sectors. Recently, it has been argued that integrated water resources management can help foster better adaptation of management and policy responses to emerging water crises. Nevertheless, few empirical studies have assessed how this type of management works in practice and what an integrated water management system implies for institutional adaptation and change. Our assessment of the Israeli water sector provides one view of how they can be shaped by an integrated structure in the water sector. Our analysis of recent efforts to adapt Israel's water management system to new conditions and uncertainties reveals that the interconnectedness of the system and the consensus decision-making process, led by a dominant actor who coordinates and sets the policy agenda, tends to increase the complexity of negotiations. In addition, the physical integration of water management leads to sunk costs of large-scale physical infrastructure. Both these factors create a path dependency that empowers players who receive benefits from maintaining the existing system. This impedes institutional reform of the water management system and suggests that integrated water resources management creates policy and management continuity that may only be amenable to incremental changes. In contrast, real adaptation that requires reversibility and the ability to change management strategies in response to new information or monitoring of specific management outcomes.