According to the US Environmental Protection Agency (EPA), 50% of water used outdoors is wasted.

EPA Water Sense Guidelines:
(Note: The following guidelines are for the peak watering month.)

If your lawn does not wilt in 6 days you can water more at longer intervals.
e.g. 1.5 inches every 10 days to get deeper penetration. See below.

To determine the most appropriate irrigation schedule for an established lawn consider the following: turf species; soil type; cutting height; potential disease and pest problems; local weather patterns; and microclimates (i.e., shade vs. full sun exposure; low vs. high areas of the yard). For example, a lawn cut at 3 inches holds water longer than a lawn cut at 2 inches; or lower areas of a lawn hold water longer than higher areas.

The rule of thumb for watering an established lawn is, "water as deeply and as infrequently as possible." Deep and infrequent irrigation stimulates root growth, resulting in healthy, drought tolerant, and pest resistant turf. While it's true that a deep, healthy root system produces vigorous turf, rooting depth is determined primarily by genetics and soil condition - not irrigation.
Healthy grass roots typically grow at least 6-8 inches deep.

Amount:
Apply 1 to 1.5 inches of water per irrigation. Determine how long this takes by setting several shallow containers (such as baking pans) in different areas of the lawn for thirty minutes while irrigating. Measure in inches the average depth of water in the containers.
Heavy clay soils and compacted soils need to be watered at a slower rate in order to avoid runoff and puddling. To avoid runoff from very heavy clay soil and/or a sloped lawn you can water for a short period, then stop and start back up again until 1 to 1.5 inches of water has accumulated.

Aeration (punching small holes in the soil) can help water penetrate.
Soil type Water absorption How deeply 1 inch of water penetrates1
Sandy Absorbs water quickly; needs less water more frequently 12 inches
Loam Absorbs water evenly, without puddling or runoff 7 inches
Clay Absorbs water slowly; can cause runoff when water applied too quickly; holds water longer (slow to dry out) 4-5 inches
1. Healthy grass roots typically grow at least 6-8 inches deep.
Source: Summer Lawn Watering Guide | Bayer

Frequency:
Deeper, less frequent (once per week) irrigations are best.
Look for signs of wilt, which often show up in the same location on the lawn time after time. Footprints or lawn mower tracks that remain at least one half hour after traffic has passed indicates irrigation is needed. Turf will also turn a shade of blue-gray when it is water stressed and in need of irrigation. If you notice this, more frequent watering may be necessary.

On very hot days turf may appear stressed even if the soil is wet. This is caused by heat stress and can be remedied by cooling off the turf by wetting it for 15 seconds or less. This technique is called syringing and is not the same as watering.

If you continue to see brown spots, check your sprinkler systems coverage for uniformity.

Cool-season grasses have shallow roots, and often require more frequent irrigations than warm-season grasses.

During periods of high rainfall, you can skip watering.
Periods of extremely hot, dry or windy conditions require extra irrigation.

Time of Day:
The best time to irrigate your lawn is between 10 p.m. and 6 a.m. During this period it is generally cooler, less windy, and the humidity is higher so evaporation losses are less. Water pressure may also be higher at this time providing a more even spray distribution pattern.

Irrigating between 10 p.m. and 6 a.m. also overlaps with the turf's natural dew period. Most diseases of turf occur when grass blades are wet for longer than 14 consecutive hours. Watering before 10 p.m. or after 6 a.m. extends the natural wetness period and increases disease problems.
If it is not practical to water during this time period, another option is to water between 9 a.m. and 11 a.m., starting the irrigation after the dew has dried but before the winds begin.
Source: Watering Established Lawns | ext.colostate.edu

The amount of water a plant actually needs [sometimes known as the "EvapoTranspiration (ET) adjustment factor"] can be summarized in this fashion: baseline water needs (the ET0).
The ET0 rates for turf grass allow for a lush, thick lawn, several inches high.
In practice, experts assume that residential lawns can get by with 70 to 80 percent of the ET0 requirements.
Source: Lawns and Water Demand in California - Public Policy Institute of California

California:
California lawn watering regions
Rgn. Inches/Week
July Dec
Cool-Season grasses
1 0.8 0.18
2 1.5 0.13
3 1.8 0.15
4 1.8 0.22
5 1.9 0.13
6 1.5 0.35
7 1.9 0.17
8 1.1 0.42
9 1.2 0.42
10 1.8 0.47
11 2.5 0.43
12 0.8 0.18
Warm-Season grasses
1
2 1.1 0.10
3
4 1.4 0.15
5 1.4 0.10
6 1.1 0.27
7
8 0.8 0.32
9 0.9 0.32
10 1.4 0.35
11 1.8 0.37
12
Sources:
- Lawn Watering Guide for California | UC Cooperative Extension Service (UCCE)
- Lawns and Water Demand in California - Public Policy Institute of California
California Irrigation Management Information System (CIMIS) - [ Irrigation Scheduling ]

Glossary:
CIMIS - California Irrigation Management Information System 
 -  a network of over 120 automated weather stations. 
EPA - Environmental Protection Agency
DWR - Deartment of Water Resources (Calif)ET - EvapoTranspiration
ET0 - Baseline water needs or Reference EvapoTranspiration (inches/month) 
  - The loss of water to the atmosphere by the combined processes of evaporation
    (from soil and plant surfaces) and transpiration (from plant tissues).
    See Water Budget Data Finder
IWMI - International Water Management Institute
LWA - Landscape water allowance (gallons/month)
LWR - landscape water requirement - The amount of supplemental water required by the 
      design of the established landscape.
OWUE - Office of Water Use Efficiency (Calif.)
Links:
Lawns and Water Demand in California - Public Policy Institute of California
Summer Lawn Watering Guide | Bayer
Watering Established Lawns | ext.colostate.edu
WaterSense Single-Family New Home Specification: Water Budget Tool .XLS | EPA
Lawn Care here
Water usage in the U.S.

last updated 22 July 2013