Based on field work in a village panchayat in Kerala, analyzing the complex issues concerning the development and working of irrigation institutions, the present study reveals that successful management of irrigation is contingent upon the level of participation of the water users in the management. By comparing irrigation institutions under different property rights, the study identifies the significant factors that contribute to the success and sustainability of irrigation institutions. It is found that albeit the physical characteristics of irrigation systems and the heterogeneities of the members of the user groups do impact the outcome, it is the institutional environment as reflected in the presence of clear as well as flexible systems of rules and regulations, enforcement mechanisms, nesting and networking of such institutions etc. that have become the most crucial determinants. For this, presence of able and fair leadership and the manoeuvring of various sources of power are found to be essential.