Despite having a more advanced water management system than most Middle Eastern countries, similar to the other countries in the region, Iran is experiencing a serious water crisis. The government blames the current crisis on the changing climate, frequent droughts, and international sanctions, believing that water shortages are periodic. However, the dramatic water security issues of Iran are rooted in decades of disintegrated planning and managerial myopia. Iran has suffered from a symptom-based management paradigm, which mainly focuses on curing the problem symptoms rather than addressing the main causes. This paper reviews the current status of water resources in Iran and recognizes three major causes for the current water crisis: (1) rapid population growth and inappropriate spatial population distribution; (2) inefficient agriculture sector; and (3) mismanagement and thirst for development. The country is faced with serious challenges in the water sector, including but not limited to rising water demand and shortage, declining groundwater levels, deteriorating water quality, and increasing ecosystem losses. If immediate actions are not taken to address these issues, the situation could become more tragic in the near future. The paper suggests some crisis exit strategies that need to be immediately adopted to secure sustainable water resources, if Iran does not want to lose its international reputation for significant success in water resources management over thousands of years in an arid area of the world.