The purpose of this study was to develop a self-navigation strategy to improve scan efficiency and image quality of water/fat-separated, diffusion-weighted multishot echo-planar imaging (ms-EPI). This is accomplished by acquiring chemical shift-encoded diffusion-weighted data and using an appropriate water-fat and diffusion-encoded signal model to enable reconstruction directly from k-space data. Multishot EPI provides reduced geometric distortion and improved signal-to-noise ratio in diffusion-weighted imaging compared with single-shot approaches. Multishot acquisitions require corrections for physiological motion-induced shot-to-shot phase errors using either extra navigators or self-navigation principles. In addition, proper fat suppression is important, especially in regions with large B0 inhomogeneity. This makes the use of chemical shift encoding attractive. However, when combined with ms-EPI, shot-to-shot phase navigation can be challenging because of the spatial displacement of fat signals along the phase-encoding direction. In this work, a new model-based, self-navigated water/fat separation reconstruction algorithm is proposed. Experiments in legs and in the head-neck region of 10 subjects were performed to validate the algorithm. The results are compared with an image-based, two-dimensional (2D) navigated water/fat separation approach for ms-EPI and with a conventional fat saturation approach. Compared with the 2D navigated method, the use of self-navigation reduced the shot duration time by 30%-35%. The proposed algorithm provided improved diffusion-weighted water images in both leg and head-neck regions compared with the 2D navigator-based approach. The proposed algorithm also produced better fat suppression compared with the conventional fat saturation technique in the B0 inhomogeneous regions. In conclusion, the proposed self-navigated reconstruction algorithm can produce superior water-only diffusion-weighted EPI images with less artefacts compared with the existing methods.