Turkmenistan, like all Central Asian countries, is critically dependent on water because of its arid desert climate. The Amudarya, flowing from the Pamir and Tien-Shan Mountains to the tragically dying Aral Sea, is the main source of water for all agricultural and non-agricultural uses in Turkmenistan. Given the constancy of water resources and the rapidly growing population in the country, the annual water availability per capita decreased by 50% during the last 35 years, dropping to 4,000 cu.m in 2004. Water has thus become the principal strategic resource that determines the region‘s economic development options. Water allocation from Amudarya is governed by regional agreements between all Central Asian states. Turkmenistan‘s share is 22 cu.km per year, or 36% of the river‘s total runoff. Agriculture is the main water user in Turkmenistan, consuming 95% of the available resources. The emphasis on the expansion of cotton production in the Soviet era and the strategy of food self-sufficiency aggressively implemented since 1992 have led to accelerated growth of irrigated areas, which increased by nearly 4 times in the last 40 years, reaching 2.3 million hectares. Almost half this area – 1 million hectares – has been added during the 15 years since independence. Irrigation is expanded without proper engineering attention to efficient conveyance of water, using mostly unlined canals and ditches with loss rates exceeding 30%. Effective water use per hectare of irrigated land has steadily declined, and it is now one-half of its level in 1970. Inadequate water availability is one of the reasons for low crop yields in Turkmenistan. The expansion of the collector-drainage network lags far behind the expansion of irrigation: between 2000-2004 the collector-drainage network grew by 7%, while the irrigated area increased by 26%. This has led to accelerated rise of the groundwater table, deterioration of soil quality, and increased salinity. More that 1.6 million hectares, or 73% of irrigated land in Turkmenistan, is salinated. Increased use of concrete or plastic lined ditches, adoption of new efficient technologies – sprinkling, drip-irrigation, subsoil irrigation, and careful attention to water consumption for crop irrigation will significantly reduce water losses and seepage into the ground, and alleviate the problems associated with rising groundwater table. Adoption of water-saving technologies is costly, but it is essential for improved efficiency of water use. This technological approach will make it possible to increase the irrigated area in Turkmenistan to 4-5 million hectares while actually raising crop yields. It will thus help the country‘s agriculture achieve its economic potential.