This paper presents a case study centred on the Murrumbidgee River basin in eastern Australia. It illustrates the dynamics of the balance between water extraction and use for food production, and efforts to mitigate and reverse consequent degradation of the riparian environment. In particular, the paper traces the history of a pendulum swing between an exclusive focus on agricultural development and food production in the initial stages and its attendant socio-economic benefits, followed by the gradual realization of the adverse environmental impacts, subsequent efforts to mitigate these with the use of remedial measures, and ultimately concerted efforts and externally imposed solutions to restore environmental health and ecosystem services. The 100-year history of development within the Murrumbidgee is divided into four eras, each underpinned by the dominance of different values and norms and turning points characterized by their changes. The various stages of development can be characterized by the dominance, in turn, of infrastructure systems, policy frameworks, economic instruments, and technological solutions. The paper argues that, to avoid these costly pendulum swings, management needs to be underpinned by long-term coupled socio-hydrologic system models that explicitly include the two-way coupling between human and hydrological systems, including the slow evolution of human values and norms relating to water and the environment. Such coupled human–water system models can provide insights into dominant controls of the trajectory of their co-evolution in a given system, and can also be used to interpret patterns of co-evolution of such coupled systems in different places across gradients of climatic, socio-economic and socio-cultural conditions, and in this way to help develop generalizable understanding.