Water resources have become an increasingly important topic of discussion in natural resources and environmental management courses. To address the need for more critical thinking in the classroom and to provide an active learning experience for undergraduate students, we present a case study based on water competition and management in the Lerma-Chapala basin of Mexico. This case was designed to promote critical thinking and enhance learning in undergraduate students through their engagement in a relevant contemporary management issue. We discuss the value of a case-study approach for natural resource and environmental courses, as well as approaches to using this case study in the classroom. The case study contains background information and stakeholder profiles relevant to the issue of water management in the Lerma-Chapala basin. It also provides sample discussion questions to help inspire higher-level thinking among students. (Contains 6 exhibits.)