Though Andean indigenous communities have a lengthy history of capable responding to water threats, anthropogenic climate change and soaring water demand have changed preterit water challenges into serious hazards. Using an ethnographic approach, this study examines how a Peruvian indigenous pastoralist community perceived and responded to climate-change induced water threats with the goal of understanding the mechanisms that enable such responses. Pastoralists report that alterations in water availability diminish the size and quality of wetlands and pastures, thus decreasing fodder for their livestock. Their primary adaptive responses are the creation of wetlands and the movement of livestock. A set of nested dynamic and flexible institutions enable households and supra-household units to carry out adaptive responses by facilitating access to alternate grazing areas and the labour force necessary to reshape the landscape. Institutions and local knowledge supporting the responses are open to exogenous information which generates opportunities for collaboration and innovation in the face of water hazards which in turn foments the resilience of indigenous pastoral social-ecological systems. This study reveals how indigenous knowledge and institutions contain strategies for adaptation to water stress that may be scaled up and replicated in national and sub-national programs.