This research report assesses water scarcity and its impacts on smallholder subsistence livelihoods in the context of climate change in Nepal, a mountainous country located entirely within the Ganges River Basin. It identifies and analyses existing coping responses and assesses options for introducing an adaptive response strategy to improve resilience of households and local communities to increasing water scarcity. The aim of this study is to contribute towards development of an integrated approach for planning adaptation measures to unprecedented and increasingly challenging local level water scarcity problems.