While the range of impacts of a changing climate on farming communities has been extensively studied in Australia, little is known about how individuals and households in small rural towns adapt to the effects of long-term water insecurity. The health and wellbeing impacts of climate variability may be experienced as direct or indirect health impacts or as reduced access to health and other services as reduced economic viability affects rural towns. Identifying risk factors for vulnerability and local measures and practices that will reduce health and wellbeing impacts offers evidence for climate change adaptation policy direction at the local, state and national level. This paper discusses the results of a study that aimed to improve understanding of the vulnerability, resilience and adaptive capacity of rural communities at the household scale. Focus groups with town residents and key informant interviews were conducted in three rural towns in Western Victoria experiencing differing water security challenges during a period of ?drought?. Perceived health and wellbeing impacts and the differing ways in which residents adapted their lives to accommodate these changes were explored. The study revealed a range of physical, mental, oral health and food security impacts on health and wellbeing. There were clear gender differences in the ways that men and women identified, communicated and dealt with these impacts. Perceived water quality and cost were shown to be key determinants of acceptance of the small town reticulated water supply. The results of this study suggest that a history of conservatism; degree of community connectedness and communication, the small town ethic of self-reliance, and the openness of government to community involvement in decision making, planning and action around water supplies are important factors in determining resilience to threats to water security in small rural towns.