There is widespread interest in dietary strategies that lower environmental impacts. However, various forms of malnutrition are also widely prevalent. In a first study of its kind, we quantify the water-scarcity footprint and diet quality score of a large (>9000) population of self-selected adult daily diets. Here, we show that excessive consumption of discretionary foods-i.e., energy-dense and nutrient-poor foods high in saturated fat, added sugars and salt, and alcohol-contributes up to 36% of the water-scarcity impacts and is the primary factor differentiating healthier diets with lower water-scarcity footprint from poorer quality diets with higher water-scarcity footprint. For core food groups (fruits, vegetables, etc.), large differences in water-scarcity footprint existed between individual foods, making difficult the amendment of dietary guidelines for water-scarcity impact reduction. Very large reductions in dietary water-scarcity footprint are possible, but likely best achieved though technological change, product reformulation and procurement strategies in the agricultural and food industries.