Water scarcity is a major concern in Israel, a country subject to arid and semi-arid climatic conditions. Water consumption exceeds the natural rate of replenishment and pollution loads intensify pressure on water resources. To respond to these challenges, Israel has implemented an advanced water pricing policy and has encouraged innovation in water-related technologies. As the water crisis has deepened, following several consecutive years of drought, more emphasis has been placed on increasing supply through an extensive programme of seawater desalination. This chapter assesses the effectiveness and efficiency of such components of Israel’s water policy, as well as of water quality management.