Despite significant progress sincegaining independence in 2002, Timor-Leste’s economy is stillstruggling with declining oil revenues and slowing economicgrowth, while access to improved basic services is still lowand vulnerability to natural disasters remain high. In thatcontext, strategic investments in the water sector andaddressing water management is crucial to meet national andinternational development commitments and to stimulateeconomic growth. Potential for the development of the waterresources exists in Timor-Leste, although it is constrainedby limited data as well as by the institutional capacity toimplement integrated water resources management (IWRM)solutions. Irrigation scheme rehabilitation has been drivenby a target of self-sufficiency in food production butrecent studies point to alternatives and more economicallyviable models for achieving this policy target. For watersupply and sanitation, Timor-Leste met its millenniumdevelopment goal (MDG) water and sanitation targets forurban areas, but missed its MDG target for rural areas.Progress has been made, although the sustainability ofservices remains a challenge. Investing in the water sectorwill have broad and significant benefits to the economy,community, and the environment in Timor-Leste.