In March 2012, Nevada's State Engineer released water right rulings for four valleys in eastern Nevada. The Southern Nevada Water Authority (SNWA) was awarded the majority of the water they applied for from Spring Valley, Cave Valley, Dry Lake Valley, and Delamar Valley. The SNWA plans to pump the groundwater and pipe it south to the Las Vegas metropolitan area. The State Engineer's decision followed a six-week water hearing and the submission of more than 23,000 public comments. Allocating scarce supplies is one of the most significant and contentious water issues facing the Western United States. As cities and population continue to grow in this region, people are seeking new approaches to increase the flexibility of existing water policies. This case study provides the opportunity to examine two dimensions of water conflict: the potential rural-to-urban water transfer and the increasingly common dilemma of how to equitably meet both human and ecological needs. Using semi-structured key-informant interviews and document analysis of the water hearing transcripts, submitted public comments, and hearing rulings, we examine the water policy debates in this highly controversial case of water allocation and transfer. In creating water policy, it is important to determine what the debates are about, who is engaged in the debates, and how various interests are being served. We analyze what happens to water policy rules in times of crisis and conflict by addressing questions about urban growth in the arid West and revisiting the rules behind the prior appropriation tenet of “beneficial use.” Our data reveal what people think about the idea of beneficial use when an urban area in the arid U.S. West continues to experience high growth rates that force it to seek additional water from surrounding and distant areas. Focusing on the rationales behind the water right rulings, we highlight how water policy decision makers try to reconcile the use of water that would serve a large number of people in Las Vegas with the much smaller numbers of ranchers and the ecological needs of the rural areas from which water would be diverted.