Equitable and reasonable utilization, the core substantive rule of the law of transboundary waters, requires the utilization of transboundary waters by States, considering the needs and interests of other States. This implies that the uses and benefits of transboundary waters should be shared in proportion to each basin State’s needs. Such needs are calculated through the consideration and balancing of factors associated with the rule of equitable and reasonable utilization. However, the formulation of the rule in the 1997 Convention on the Law of the Non‐navigational Uses of International Watercourses does not prescribe how the balancing between competing needs of the transboundary watercourse States may be achieved. This article argues that the principle of proportionality can play a role in facilitating the equitable balancing between the competing needs of States in transboundary river basins. Proportionality can also play a role in informing the balancing inherent in other substantive and procedural rules and dispute resolution in the law of transboundary waters. The article further examines the role of proportionality in benefit‐sharing practices in transboundary river basins, where States have adopted a proportionate cost–benefit‐sharing approach. The article uses China as an example to understand the role of proportionality in informing Chinese transboundary water treaties.