Land Use Policy, 2015; 48 (2015): 351–361tWater scarcity is among the contemporary problems of our time across the globe. The problem is wors-ened by policy failures to enforce water governance and watershed conservation. Consequently, it hascurtailed the capacity of watersheds to release hydrological services, water in particular. We carried outthis study to explore approaches for watershed conservation and investigate water governance challengesin Pangani River Basin, Tanzania. We collected data by using structured questionnaires and meetings withdifferent actors in the study area. We found that retaining riparian vegetation is the appropriate strategyfor watershed conservation and sustainable water flow. Water governance challenges include ineffectiveand uncoordinated water governing institutional structures; and untrustworthy financial management.We feel that building the capacity of water users association could bring about positive outcomes forboth watershed conservation and water governance. We recommend that strategies and policies aimedat improving the flow of hydrological services should also focus on improving the welfare of the localcommunities, who are the primary beneficiaries of water from watersheds.