The availability of fresh water for human consumption is a critical global issue and one that will be exacerbated by the impacts of climate change. Water demand management has an important role to play in reducing the vulnerability of freshwater supplies to climate change impacts. In this paper, we argue that the field of psychology and environmental psychology in particular can make a vital contribution in understanding further the drivers of residential water demand. A growing body of literature in environmental psychology has examined the determinants of water conservation behavior, and this research has many potential applications for water demand policy. In this paper we offer a review of current psychological research that examines the five broad causes of residential water conservation behaviors: attitudes, beliefs, habits or routines, personal capabilities, and contextual factors. We assess how psychologists have studied water conservation behavior to date, identify shortcomings, and indicate how this research can be used to further promote residential water conservation and to inform evidence-based policy and practice.