This study was one of the first attempts to evaluate and quantify the benefits of transboundary co-operation between Georgia and Azerbaijan. A specific framework for inventorying these benefits, taking into account all the different dimensions of transboundary water management, was built and applied to the major transboundary water bodies. Though a thorough assessment of the costs and benefits of transboundary co-operation in the two selected cases was not possible due to the lack of some quantitative and economic data, the assessment results highlighted the importance of promoting the integration of economic thinking in transboundary water management. The present and future prospects for transboundary co-operation on water management are still very positive: the two countries are working on a Transboundary Agreement, which will provide the necessary regulatory framework for co-operation and, most importantly, will set up a Joint Commission on Sustainable Use and Protection of the Kura River Basin. The outcomes of this study allowed for the identification of priorities for future work on transboundary co-operation between Georgia and Azerbaijan, and namely, support to developing guidelines on mechanisms to update databases, but also on new tools and systems.