The southwest region of Western Australia has experienced a sustained sequence of low annual inflows to major water supply dams over the past 30 years. Until recently, the dominant interpretation of this phenomenon has been predicated on the existence of one or more sharp breaks (change or jump points), with inflows fluctuating around relatively constant levels between them. This paper revisits this interpretation. To understand the mechanisms behind the changes, we also analyze daily precipitation series at multiple sites in the vicinity and time series for several indices of regional atmospheric circulation that may be considered as drivers of regional precipitation. We focus on the winter half-year for the region (May to October) as up to 80% of annual precipitation occurs during this “season”. We find that the decline in the annual inflow is in fact more consistent with a smooth declining trend than with a sequence of sharp breaks, the decline is associated with decreases both in the frequency of daily precipitation occurrence and in wet-day amounts, and the decline in regional precipitation is strongly associated with a marked decrease in moisture content in the lower troposphere, an increase in regionally averaged sea level pressure in the first half of the season, and intraseasonal changes in the regional north-south sea level pressure gradient. Overall, our approach provides an integrated understanding of the linkages between declining dam inflows, declining precipitation, and changes in regional atmospheric circulation that favor drier conditions.