This article is available at http://dx.doi.org/10.1016/j.ecohyd.2014.11.002Watersheds and rivers are vital ecological features for the provision of hydrological services for the health, welfare and prosperity of human communities. Nevertheless, anthropogenic activities coupled with climate change and climate variability are blamed for degrading watersheds and rivers and decreasing their capacity to irrigate. To address the situation, it is important to understand why and how water shortages are occurring. This paper reports findings of a study carried out to identify and assess drivers of water shortages and adaptation strategies to climate change and variability in Pangani River Basin of Tanzania. To assess the influence of climate change and variability on hydrological flow and water shortages, time series data on rainfall and temperature were compiled from the Tanzania Meteorological Agency. We also used structured questionnaires to collect data on villagers’ perceptions about the drivers of water shortages and adaptation strategies. Results indicated a decreasing trend of water flow (p < 0.05) at Kikuletwa– Karangai gauging station along Pangani River Basin. Trend analysis indicated a slight decrease of rainfall and increase of temperature. Although there is no empirical evidence to associate climate change with the decline of rainfall and water flow, adaptation measures need to be put in place in order to mitigate against increasing climate variability, reduced water flow, and projected climate change. Therefore, watershed conservation strategies should also focus on improving the welfare of local communities. Additionally, involvement of stakeholders in the entire PRB is crucial toward watersheds conservation for steady flow of hydrological services.This work was funded by the Belgium Government through the Belgium Technical Cooperation (BTC) (grant no. 09TAN/5917).