The region is known by its tensed political situation, in particular, within the Nagorno - Karabagh, Abchasia and South - Ossetia conflicts. The political situation and absence of the diplomatic relations among several countries hampers in establishment of any cooperation in transboundary water management issues, which is resulting in deterioration of water quality, degradation of ecosystems in river basin, increase of flooding and bank erosion, etc. Thus, the countries of the Southern Caucasus have failed to develop a legal basis for the management of the water resources that they share. Indeed, how these rivers are managed has barely been discussed. Although Georgia and Azerbaijan have signed a number of agreements and memorandums, and have made provisions to share data, the lack of equipment and funds to undertake systematic monitoring of water availability and quality means that little data exchange has occurred. However, water is a key resource for the Southern Caucasus countries, contributing significantly to the agricultural sector, the export economy and energy production. This means that various issues should be addressed and measures should be undertaken to develop a basis for transboundary cooperation. The paper discusses major concerns of South Caucasus countries in transhoundary water management development for Kura - Aras river basin.