A World Bank report on the management and organization of irrigation projects calls water allocation or distribution one of the astonishingly neglected areas of research with a high potential payoff. Although water distribution involves complex technical, institutional and investment questions, the potential payoff from improving irrigation systems is large. This chapter presents water allocation among farmers, water transmission to farmers, and water source allocation. Some combination of regulations and prices should be used to allocate water. The particular mix of rules and prices depends on a number of factors including: the value of water, the ability to collect fees, dependability of supply, cropping patterns, control structure, and project objectives. The aspect of transmission which has been all but neglected is the economics of irrigation scheduling. As the distance between water source and field increases, there is a greater cumulative effect of seepage and evaporation losses from delivery channels.