This study highlights two highly degraded watersheds in the semi-arid Amhara region of Ethiopia where integrated water resource management activities were carried out to decrease dependence on food aid through improved management of ‘green’ water. While top-down approaches require precise and centrally available knowledge to deal with the uncertainty in engineering design of watershed management projects, bottom-up approaches can succeed without such information by making extensive use of stakeholder knowledge. This approach works best in conjunction with the development of leadership confidence within local communities. These communities typically face a number of problems, most notably poverty, that prevent them from fully investing in the protection of their natural resources, so an integrated management system is needed to suitably address the interrelated problems. Many different implementing agencies were brought together in the two study watersheds to address water scarcity, crop production, and soil erosion, but the cornerstone was enabling local potential through the creation and strengthening of community watershed management organizations. Leadership training and the reinforcement of stakeholder feedback as a fundamental activity led to increased ownership and willingness to take on new responsibilities. A series of small short term successes ranging from micro-enterprise cooperatives to gully rehabilitation have resulted in the pilot communities becoming confident of their own capabilities and proud to share their successes and knowledge with other communities struggling with natural resource degradation.