The water allocation problem is complex and requires a combination of regulations, policies, and mechanisms to support water management to minimize the risk of shortage among competing users. This paper compiles the application of multi-criteria decision-making (MCDM) related to water allocation. In this regard, this paper aims to identify and to discern the pattern, distribution of study regions, water problem classifications, and decision techniques application for a specific water allocation problem. We applied a systematic literature review study from 2000 to 2019 by using four literature databases (Web of Science, Scopus, Science Direct, and Google Scholar). From 109 papers, 49 publications have been identified and information extracted. This study reveals that in the past two decades the application of MCDM in the area of water allocation has increased particularly after 2014. Around 65% and 12% of study papers were conducted in Asia and Europe, respectively. Water shortage, water use management, and water quality were consecutively the most top-ranked discussed water problems. NSGA II (non-dominated sorting genetic algorithm), GA (genetic algorithm), and LP (linear programming) are the more often applied decision methods to solve water allocation problems. The key findings of this study provide guidelines for future research studies.