It was investigated that the factors influenced the formation of sub-group formation and the impact on the adoption of the alternate wetting and drying (AWD) practice. It is based on a grouplevel or household-level data set collected in 2006-2007 in China. The reasearch showed that as long as the endowment of social capital is high, water user groups tends not to form subroup because high social capital can prevent overuse of water. On the contrary, when social capital in a group is low, farmers need to avoid overuse of water by forming sub-g...