This study investigates the multifaceted consequences of the Cutzamala Interbasin Water Transfer System on the hydrosocial territory of Valle de Bravo, Mexico. The research explores how large-scale water transfer to Mexico City has triggered a cascade of socio-environmental transformations in the source region. This is done through a mixed-methods approach that draws on literature reviews, document analysis, and stakeholder interviews. Using the hydrosocial territory framework approach, a complex interplay of water scarcity, economic shifts, and power dynamics is identified. The uneven distribution of interbasin benefits and burdens is evident in agricultural decline, the growth of tourism-dependent economies, and reduced access to water for local communities. This study highlights the concentration of water control in external entities such as CONAGUA and SACMEX, thereby marginalizing local participation in water governance. This research proposes strategies for integrating traditional ecological knowledge, mitigating the adverse impacts of the Cutzamala system, and empowering local communities in decision-making processes to foster more equitable and sustainable water management. This research presents a deeper understanding of the hydrosocial dynamics surrounding large-scale water transfer projects and recommends advocating for more inclusive and participatory approaches to water governance.