Integrated water resources management (IWRM) is viewed by policy makers and practitioners as facilitating the achievement of a balance between water resource use and resource protection, and the resolution of water-related conflicts. The IWRM approach has found particular use in the new water policies of Southern African countries such as Zimbabwe, where water scarcity, after the land question, is perceived to be a major threat to political, economic, social, military and environmental security. Ultimately, IWRM is seen as providing a framework towards ensuring broader security at the local, national, regional and global levels. However, the pilot phase implementation of the new water policy in the various regional countries has revealed that although the legal and institutional frameworks have been put in place, the implementation of the IWRM approach has tended to be problematic (J. Latham, 2001; GTZ, 2000; Leestemaker, 2000; Savenige and van der Zaag, 2000; Sithole, 2000).This paper adopts a case study approach and empirically examines the institutional challenges of implementing the IWRM approach in the post-pilot phase of Zimbabwe’s new water policy. The focus is mainly on the institutional arrangements surrounding the Pungwe–Mutare Water Supply Project located within the Save Catchment Area in Eastern Zimbabwe. The major findings of the study are that, while there persist some problems associated with the traditional management approach, there have also emerged new challenges to IWRM. These mainly relate to the transaction costs of the water sector reforms, institutional resilience, stakeholder participation, and the achievement of the desired outcomes. There have also been problems emanating from unexpected political developments at the local and national levels, particularly with regard to the government’s “fast track” land resettlement programme. The paper concludes that there is a need for a more rigorous effort towards integrating the management of water resources by the catchment level institutions.