Virtual water is the amount of water required for the production of a commodity. Trading commodities implies Virtual Water Trade (VWT). This study was conducted to determine the VWT derived from intra-regional trade of six cereals (maize, paddy rice, millet, sorghum, wheat and barley) for ten countries within Eastern Africa from 1998 to 2003. It involved quantifying the VWT, assessing the role of water scarcity in shaping VWT and determining the quantity and nature of water savings generated. Quantifying the VWT included delineating major crop growing zones and calculating Crop Water Requirement (CWR) using a model, CropWat. Virtual water contents derived from CWR were multiplied with intra-regional cereal trade flows to obtain the VWT. Results show that virtual water contents vary significantly within the region, being higher in the arid countries than the humid countries, partly because of water scarcity in these countries. Virtual water flows for the region averaged 150 Mm3 year-1 of water whilst “water savings” averaged 31 Mm3 year-1. Sudan, Uganda and Tanzania are the only net virtual water exporters, exporting a combined volume of 110 Mm3 year-1, whilst the other seven countries are net importers, the largest importer being Ethiopia. No correlation was found between a nation’s water scarcity status and virtual water imports, suggesting that intra-regional cereal-derived VWT is not a conscious choice but arises for other reasons like comparative advantage. Sorghum and maize trade accounted for the largest virtual water flows, 36% and 38%, respectively, the former due to the high unit virtual water content of the major exporting countries and the latter due to the large tonnage traded. In a regional virtual water policy, Kenya, Sudan, Djibouti, Eritrea and Somalia can be potential virtual water importers, whilst Tanzania, Uganda, Rwanda, Burundi and Ethiopia can be potential virtual water exporters. It was concluded that VWT had a big role in water savings in water scarce countries. This has been considered as a change in water resources systems, and hence maintenance in water security and insurance in integrated management.