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Tensions over freshwater resources may become more frequent as pressures on water resources grow due to increased demand and variability of rainfall. Conflicts may take place between or within countries or between competing sectoral users. This paper focuses on institutional approaches for enhancing cooperation between countries for sustainable development of transboundary freshwater bodies and contributing basins. It is assumed that instead of being zones of conflict, shared water resources can provide a basis for cooperation and benefit–sharing provided that threats to the international waters are recognized and collaborative structures are created. The paper draws upon experiences gained within the international waters focal area of the Global Environment Facility, the main funding mechanism for countries to support the environmental management of transboundary water resources. Lessons for promoting peaceful cooperation for environmental management, benefit–sharing and sustainable use of transboundary freshwater resources are highlighted through examples from Africa, Central Asia and Latin America. Experience shows the importance of processes that bring together all sectors and actors whose actions affect the transboundary waterbody at regional, national and local levels. The development of a science–based diagnostic analysis is essential to identify the threats to the transboundary ecosystem and to break down the issues into manageable parts with the aim of developing a strategic action programme. Ensuring political commitment that can result in institutional, policy and legal reforms in the countries concerned is the key to sustainable development of the transboundary resource.

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