Abstract Challenges faced by more and more countries in their struggle for economic and social development are increasingly related to water. The water sector shows an emerging global crisis, presenting shortages, quality deterioration, flood impacts, increased competition for use and governance problems. In the mean time notable population growth, increasing water consumption and climate change have created severe limitations for social, economic and human development and poverty alleviation. This brings us to the question: why is water resource development and management a main instrument in creating a green economy? The answer to this question can be found in the definition of green economy (UNEP, 2011) as one which results in improving human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. Accordingly, it is quite evident that green growth, fundamentally based on water resource development, is an outcome of green economy and that a green economy cannot be totally green unless it addresses water issues. In other words, a blue economy is a prerequisite of a green economy. Considering the core features of green economy, it is quite obvious that water-use efficiency and improving crop water productivity, i.e increasing crop by drop, are central aspects of green economy. This directly indicates the crucial role regional and locally adapted water management strategies could have in underpinning the transition towards the green economy in the water sector. Equally, policy reforms should implement integrated land and water resource management through innovative capacity development approaches, focusing on the water demand side rather than the supply side, promoting water use efficiency and the sustainable use of waste water as an additional water source. Moving towards a green economy through water resource management, specific attention should be given to capacity development programmes; to developing and retaining local capacity for sustainable maintenance of green technology; and to establishing an appropriate valuation, charging and allocation system. In the Mediterranean, transitioning to a green water economy requires a fundamental shift in the way we think and act. For this to happen, investments in people's capacities and fulfilment of their entitlement are needed by means of greater education, training, information, awareness, understanding and participation in decision-making processes. Investments and technological progress are important in moving towards a green water economy, but equally important are awareness, motivation and empowerment of individuals and communities.