Iran’s water crisis has reached a point where it can no longer be explained solely in terms of reduced precipitation or climate variability. The central question addressed in this study is why, despite numerous plans, policy documents and repeated expert warnings, Iran’s water governance system remains unable to contain the escalating cycle of drought and water scarcity. Existing analyses typically highlight only a single dimension of the crisis. At the same time, the absence of an integrated framework capable of examining institutional, policy and operational layers simultaneously has hindered a comprehensive understanding of its structural roots. This study aims to provide a three-tiered analysis of water governance in Iran, examining how failures in decision-making, policy formulation and implementation interact to reproduce and intensify the crisis. Using a conceptual-analytical method and a three-level governance model (macro-level decision-making, meso-level policy design, and micro-level implementation), the study draws on the literature on water governance, policy failure and risk governance as its evaluative foundation. This framework enables a relational assessment of key factors such as institutional fragmentation, misaligned policy instruments, the absence of risk-oriented approaches and the persistent gap between expert knowledge and decision-making structures. Findings reveal that Iran’s water crisis results from the convergence of three interrelated factors: institutional inefficiencies at the macro level, misaligned and ecologically incompatible policies at the meso level, and limited implementation capacity coupled with weak risk management at the operational level. The study concludes that without structural reconfiguration across these three layers and a transition toward integrated and risk-informed water governance, reversing the trajectory of the crisis and achieving long-term water security will remain unattainable.