The production of milk must be balanced with the sustainable consumption of water resources to ensure the future sustainability of the global dairy industry. Thus, this review article aimed to collate and summarize the literature in the dairy water-usage domain. While green water use (e.g., rainfall) was found to be largest category of water use on both stall and pasture-based dairy farms, on-farm blue water (i.e., freshwater) may be much more susceptible to local water shortages due to the nature of its localized supply through rivers, lakes, or groundwater aquifers. Research related to freshwater use on dairy farms has focused on monitoring, modeling, and analyzing the parlor water use and free water intake of dairy cows. Parlor water use depends upon factors related to milk precooling, farm size, milking systems, farming systems, and washing practices. Dry matter intake is a prominent variable in explaining free water intake variability; however, due to the unavailability of accurate data, some studies have reported moving away from dry matter intake at the expense of prediction accuracy. Machine-learning algorithms have been shown to improve dairy water-prediction accuracy by 23%, which may allow for coarse model inputs without reducing accuracy. Accurate models of on-farm water use allow for an increased number of dairy farms to be used in water footprinting studies, as the need for physical metering equipment is mitigated.