Hydrological drought is a substantial negative deviation from normal hydrologic conditions and is influenced by climate and human activities such as water management. By perturbing the streamflow regime, climate change and water management may significantly alter drought characteristics in the future. Here we utilize a high‐resolution integrated modeling framework that represents water management in terms of both local surface water extraction and reservoir regulation and use the Standardized Streamflow Index to quantify hydrological drought. We explore the impacts of water management on hydrological drought over the contiguous U.S. in a warming climate with and without emissions mitigation. Despite the uncertainty of climate change impacts, local surface water extraction consistently intensifies drought that dominates at the regional to national scale. However, reservoir regulation alleviates drought by enhancing summer flow downstream of reservoirs. The relative dominance of drought intensification or relief is largely determined by the water demand, with drought intensification dominating in regions with intense water demand such as the Great Plains and California, while drought relief dominates in regions with low water demand. At the national level, water management increases the spatial extent of extreme drought despite some alleviations of moderate to severe drought. In an emissions mitigation scenario with increased irrigation demand for bioenergy production, water management intensifies drought more than the business‐as‐usual scenario at the national level, so the impacts of emissions mitigation must be evaluated by considering its benefit in reducing warming and evapotranspiration against its effects on increasing water demand and intensifying drought.