This study employs system dynamics modeling as an innovative approach to analyze the complex interactions among water consumption, supply sustainability, and socio-economic welfare dimensions in Tehran. The modeling results indicate that maintaining the current per capita consumption (240 liters per day) leads to significant groundwater depletion, exacerbates land subsidence, and triggers consequences such as migration, while increasing dependency on inter-basin water transfers and severely threatening supply sustainability. Conversely, a scenario reducing per capita consumption to below 200 liters per day, coupled with the adoption of water recycling technologies and revised pricing policies, can enhance resource sustainability and promote equitable access to water. The findings reveal that the welfare index declines across all scenarios, with reductions in 2071 relative to the baseline year of 476% in the unfavorable scenario S3 (15% climate change impact, 240 liters per capita consumption) and 352% in the favorable scenario S7 (5% climate change impact, 160 liters per capita consumption). By 2100, these reductions intensify to 505% and 443% in scenarios S3 and S7, respectively. Furthermore, in high-consumption scenarios S1, S2, and S3 (240 liters per day), the percentage increase in the adverse change of the total welfare index relative to the baseline, compared to managed consumption scenarios S7, S8, and S9 (160 liters per day), is 29.3%, 26.5%, and 20.6% in 2071, and 12.1%, 10.7%, and 9.3% in 2100, respectively. The groundwater index also indicates resource depletion within less than a decade across all scenarios.