Multilevel governance of common-pool natural resources has been shown under certain conditions to sustain resources over time even when faced with various social and environmental disturbances or shocks. In the case of irrigation systems, evidence shows that multilevel institutional arrangements that include communities in a decentralized system of governance can function better than centralized systems. Kenya has implemented a legislative framework for water governance that decentralizes many aspects of water management to local levels, resulting in a multilevel institutional regime. Community water projects are empowered to manage some aspects of water resources for irrigation and domestic use—purportedly a level at which decision-makers are better suited to adapt to local dynamics. However, climate change and population increase constantly challenge the ability of these water projects to modify rules for water allocation so that all water demands are met. In this chapter, we describe the governance structure of community water projects near Mt. Kenya and illustrate the challenges for adaptive capacity with respect to different social and environmental disturbances.