The Colorado Water Resources Research Institute (now the Colorado Water Institute) was created in 1965 on the Colorado State University campus to oversee water research and disseminate new information to citizens. In 1964, Congress passed the Water Resources Research Act to better coordinate the nation's water research programs at a time when water management, especially in the West, was challenged by increasing agricultural, municipal and industrial use. The legislation was based on the Hatch Act of 1887 which established the state agricultural experiment station system and, like the experiment stations, the new water research institutes were also financed by federal and state funds. Water research institutes were organized at the nation's land grant colleges.

Universities were enthusiastic about the new program and William E. Morgan, president of Colorado A and M (now Colorado State University) and chairman of the Water Resources Committee of the National Association of State Universities and Land Grant Colleges, played an important role in the passage of the WRR Act. CSU had long been a leader in the West in water and agricultural research and engineering and was an ideal choice for the location of the new research institute. In the early 1880s, the college offered the earliest courses in irrigation engineering in the United States and soon established a Department of Physics and Engineering to further focus on irrigation. In 1912, a hydraulics laboratory was constructed on campus where numerous experiments were conducted by several distinguished scholars. Advancements in irrigation and other water-related matters were disseminated from the college throughout Colorado and the West.

The Colorado Water Resources Research Institute (CWRRI) was initially established as a division within CSU's newly created Natural Resources Center (NRC), where university faculty coordinated federal, state and university research in natural resources as authorized by the State Board of Agriculture. The name of the Natural Resources Center changed by 1970 to the Environmental Resources Center (ERC); however, CWRRI functions remained the primary focus of the center. In 1974, the ERC, and therefore CWRRI, was affiliated with the Colorado Agricultural Experiment Station at CSU. In 1978-1979, CWRRI was separated from the ERC and the Experiment Station and made a separate agency on the CSU campus. The Colorado General Assembly officially recognized this division in 1981. In 2008, Colorado legislators approved HB08-1026, which changed the name of the CWRRI to the Colorado Water Institute (CWI) and updated and expanded its mission. Since 1965, five people have served as director of the CWRRI: Stephen C. Smith (1965-1967), Norman A. Evans (1967-1988), Neil S. Grigg (1988-1991), Robert C. Ward (1991-2006), and Reagan Waskom (2006-present).

Until the early 1980s, CWRRI was typically known within its own organizational files in this collection as the ERC. Throughout the collection, NRC, ERC and CWRRI alternately appear on material although they refer to the same organization. Because most references are to the ERC and little material is identified as CWRRI, the acronym ERC/CWRRI was used in the finding aid inventory although file folder titles and material in the folders reference one name or the other.

The water resources research program that created CWRRI was originally overseen by the Office of Water Resources Research (OWRR), later renamed the Office of Water Research and Technology (OWRT), both part of the Department of the Interior. After passage of a new Water Resources Research Act in 1984, the program was reassigned to the Water Resources Division of the U.S. Geological Survey and was authorized by Colorado's legislature to operate as an official entity of Colorado State University. The institute receives an annual base grant and competitively bids for grant money distributed by the USGS among regional and state water resources research institutes.

Despite the various changes CWRRI has undergone over the years, its mission has remained largely the same. CWRRI identifies and prioritizes water problems for research, plans and manages research projects in the state's universities, disseminates new technology and information, and acts as a liaison between the state and the federal departments that administer research funding. CWRRI regularly publishes reports, conference proceedings, and other educational materials in order to make current water knowledge readily available to Colorado citizens.