There is now a fairly substantial literature that addresses transboundary water allocation both at the international and interstate level. However, most of this literature deals almost exclusively with the question of allocation and ignores quality considerations. At the same time, there is a growing literature on trans boundary pollution control and upstream/downstream externalities. What is missing is an attempt to integrate quality consideration into allocation agreements. This paper examines several allocation agreements and disputes in the southwestern United States and Mexico and looks at the ramifications of omitting pollution control and quality considerations in these negotiations.© 2000 Elsevier Science B.V. All rights reserved.