Water scarcity is globally getting worse in the light of increase in demand for water use. Human and ecosystem health and economic development are affected by problems of water scarcity and water pollution. This study was carried out to assess the current net benefit of water resource in different land uses around the Kilombero Valley Ramsar Site in Tanzania. Specifically the study was conducted to identify different land uses related to water, to determine and estimate costs and benefits of different land uses related to water and to quantify the monetary value of water in different land uses. Household questionnaires, checklist for key informants, participant observation and PRA techniques were employed for data collection. The data relating to household characteristics and water related economic activities were analysed using SPSS (version 16) whereby the cost for production, inputs and returns were analysed and compared using Microsoft Excel. The residual imputation approach was used to estimate the values of water in different land uses. The findings revealed that the main land uses were irrigation and rainfed agriculture, livestock keeping, small scale business and vegetables production. This study also established that the net values of water for brick making, livestock and domestic use are very high averaging at around Tsh. 3 186.7 (US$ 1.7) Tsh. 1 721.7 (US$ 1.4) and Tsh. 1 282.5 (US$ 1.3) per m 3 of water consumed respectively. For irrigated crops such as paddy and non paddy crops the net values were estimated to Tsh. 273.6 (US$ 0.23) and Tsh. 87.7 (US$ 0.073) per m 3 of consumed water respectively. Results show that the return from agriculture is smaller compared to returns from other water uses. Nevertheless, since majority of households are depending on agriculture this study recommends that emphasis should be put on effective and efficient use of water to improve its productivity.