Make a plot plan of your yard. A plot plan shows the footprint of your house, garage, shed, deck, driveway, hardscaping (patios and walkways) and existing garden beds and their relation to each other. The plan will show where you are wasting water, where plants should go to take advantage of rain runoff, and will help you design future water-conscious plantings.
Have a soil test done on your yard. Knowing what type of soil you have and the nutrients it might be lacking will help you choose plants suitable for your yard.
Mix 3 to 4 inches of compost into the top 6 inches of top soil. Compost helps soil retain moisture (which means less watering) as well as provide nutrients to plants. Do this every year to keep your soil in top condition.
Use 1 to 3 inches of mulch, depending on the plant, around all of your plants. Mulch also helps conserve water by reducing evaporation and runoff.
Use drip hoses or irrigation lines to water your plants at the soil level. Watering from above wastes water as it lands on plant leaves, walkways and other areas where plants cannot use it. Adjust drip hoses and irrigation lines so they only water plants and not bare areas. Maintain drip hoses and irrigation lines and check frequently for leaks.
Water plants in the early morning or evening. There is less water loss because of evaporation at these times.
Adjust how much water you give plants in response to their requirements. For example, tomatoes growing in July need more water than tomatoes growing in April.
Remove lawn and replace with flower borders, shrubs and trees. Turf grasses need more water than any other perennial in your garden. Relegate lawn to play and entertainment areas only.
Group plants with similar water requirements. Place plants that need a lot of water close to patios and other structures, and put plants that are drought-tolerant on the edge of your property. This allows plants that need a lot of water to benefit from rain runoff from buildings and hardscaping.
Grow plants that are hardy in your area. For instance, gardeners in the Southwest shouldn't try to grow cottage garden plants that require excessive amounts of water but rather concentrate on plants that thrive in arid or semi-arid regions.
Maintain your garden. Prune shrubs and trees and deadhead flowers. Fertilize regularly (using organic or commercial fertilizers), control pests and diseases. Healthy plants will need less water than overgrown plants beset with insects. Mow your grass with the highest settingr. Grass that is left 3 to 4 inches high conserves moisture by shading the soil and losing less water to evaporation.
Place rain barrels in strategic locations to collect rainwater. Water plants with the collected rainwater. Water your plants with "gray" water (water used to wash dishes and bathwater). Doing this, especially in areas with limited rainfall, can drastically lower water usage.