The state of Texas in the United States is highly susceptible to drought. Its major rivers are subject to extensive water management (WM) activities in order to sustain multisectoral water demands, particularly during drought conditions. However, the impact of WM on the propagation dynamics and characteristics of hydrological drought (HD) in Texas remains unclear. To fill this gap, this study quantifies the influence of WM across 32 streamflow gauges along the mainstems of seven major rivers in Texas by comparing a variety of drought metrics under natural and managed conditions. Notably, we leveraged an extensive, observation-based naturalized streamflow dataset constructed by the Texas Water Development Board (TWDB) as a benchmark for natural flows, paired with gauge observations of managed conditions. Results indicate that at the multi-decadal scale, WM significantly reduced HD frequency across all seven rivers and at 81% of the gauges analyzed. Additionally, it increased the response timescale of HD across Texas’ major rivers by a median of 2.5 months. Conversely, the average-event duration and severity increased in most locations. Temporal analysis reveals that the WM impact on HD varies seasonally, with attenuation effects during mid-summer and early fall and intensification effects during late winter and spring. Additionally, WM was found to greatly increase the spatial variability of HD characteristics across the region. These findings emphasize the complexity of WM effects on HD and the necessity for nuanced strategies in managing HD under WM influences.