In settler colonial states, the doctrine of discovery that dispossessed Indigenous Peoples of their lands also took their waters. The original water theft of colonization was underpinned by the erroneous assumption of ‘aqua nullius’ and remains almost entirely unacknowledged and largely unaddressed. Scholarly literature has focused on the injustice of this water theft and the human rights of Indigenous Peoples (under UNDRIP as well as their human right to water). This review shows that aqua nullius also renders settler state water law not fit for purpose in two important ways. Firstly, the legitimacy of settler state water laws is contested, presenting a foundational challenge to water governance, and failing to acknowledge the plurality of water laws in settler colonial states. Secondly, settler water law is experiencing a more widespread failure to deliver ecologically sustainable water management. In responding to the injustice of aqua nullius, foundational reform of settler state water laws can enable the settler state to learn from Indigenous laws that have supported thriving communities and genuinely sustainable water management for millennia. Drawing on examples from Aotearoa New Zealand, the USA, Canada, and Australia, this review shows how acknowledging, and challenging, the false assumption of aqua nullius creates novel pathways for reform, enabling pluralist water laws and water governance models that improve both legitimacy and sustainability of settler state water governance.