In their efforts to adapt to changing conditions and grasp opportunities, small-scale farmers have been innovating since time immemorial. With increasing scarcity of water, harnessing water productivity in crop–livestock systems will require enhancing such local innovation processes, including both endogenous development and local adaptation of exogenous interventions. The paper highlights the importance of taking an innovation systems perspective in this endeavour. The various actors involved in agricultural production, extension, research, education, policymaking and trade who can contribute to or constrain innovation processes need to be recognised and their interactions understood. Particularly in the realm of working with water – often the task of women and girls – gender aspects must be addressed, including women’s role in innovation processes and the impact of change in water access and use on women’s workloads and decision-making. The paper presents examples of technical and socio-institutional innovation to improve crop–livestock water productivity that have been developed by local resource users. It demonstrates how scientists and technical advisors in research and development organisations can harness these dynamics in local knowledge by identifying local innovations, exploring together with local people the rationale behind them, and explaining in scientific terms why they work. It argues for an approach to research that allows farmers to be creative and that strengthens their capacities to continue to adapt to changing conditions. It stresses the role of researchers in revealing how farmers are developing solutions that challenge official policy, and then joining forces with farmers to bring about policy change to accommodate and encourage local innovation. Thus, it presents one ‘intervention’ that could enhance crop–livestock water productivity: promoting an approach of recognising local innovation and engaging in participatory research with local people who are developing their own ways to make the most of scarce water.