The estimated overall annual runoff for Costa Rica is 2200 mm which corresponds to an outflow of 3557 m3s−1. Gross water utilization by hydroelectricity, irrigation, navigation and potable-industrial uses has increased significantly during recent decades. During the period 1970–1987 the percentage of available water used doubled from 6% to 12%. An estimate for the year 2000 indicates that the degree of gross water utilization will increase to about 20%. Water resources availability, therefore, is not a problemper se.There are, however, water scarcity and allocation conflicts due primarily to water pollution and uneven water distribution in time and area. Specific environmental and policy issues are discussed. Among these are the lack of institutional coordination, inadequate water legislation, accelerated environmental degradation and absence of watershed management programmes. A significant change in the national policy toward natural resource management has taken place in the last two years with the creation of the new Ministry of Natural Resources and the development of the National Strategy for Sustainable Development. These changes in policy are giving an opening for a new water resources management response that, in conjunction with other productive sectors such as energy, agriculture and forestry, will lead to a sound approach in the planning and management of the resource. Multilateral and bilateral development agencies, as well as international private and voluntary organizations sponsoring development activities in the country, must support the implementation of this National Strategy so that the desired objectives may be accomplished.