Water-literate individuals effectively reason about the hydrologic concepts that underlie socio-hydrological issues (SHI), but functional water literacy also requires concomitant reasoning about the societal, non-hydrological aspects of SHI. Therefore, this study explored the potential for the socio-scientific reasoning construct (SSR), which includes consideration of the complexity of issues, the perspectives of stakeholders involved, the need for ongoing inquiry, skepticism about information sources, and the affordances of science toward the resolution of the issue, to aid undergraduates in acquiring such reasoning skills. In this fixed, embedded mixed methods study (N = 91), we found SHI to hold great potential as meaningful contexts for the development of water literacy, and that SSR is a viable and useful construct for better understanding undergraduates’ reasoning about the hydrological and non-hydrological aspects of SHI. The breadth of reasoning sources to which participants referred and the depth of the SSR they exhibited in justifying those sources varied within and between the dimensions of SSR. A number of participants’ SSR was highly limited. Implications for operationalizing, measuring, and describing undergraduate students’ SSR, as well as for supporting its development for use in research and the classroom, are discussed.