Drawing on fieldwork from the Sustainable Livelihoods in Southern Africa programme - largely undertaken in Zimbabwe, with some additional material from South Africa and Mozambique - this article examines the politics surrounding water resources and policy change in southern Africa. It outlines the policy contexts of water reforms in the three countries. The article then investigates: the process of institution-building accompanying water policy reform and resulting complex and politicised institutional layering; the contested meanings attached to water by different stakeholders and their implications for new institutions and decision-making processes; and the significance of the "grey area" between domestic and commercial water usage to an understanding of the role of water in household livelihoods. It draws some conclusions as to possible policy development and implementation options that could address these critical issues.