While Peru accounts for about four per cent of the world's annual renewable water resources, over 98% of its water is available east of the Andes, in the Amazon region. The coastal area of Peru, with most of economic activities and more than half of the population, receives only 1.8% of the national freshwater renewable water resources. Economic and population growth are taking an increasing toll on water resources quantity and quality, especially in the coastal area of Peru.

The government of Peru is currently undertaking a major transformation of its water resources management from a centralized approach focused on irrigation development in the coastal area to a river basin integrated water resources management for the entire country. The 2009 Water Resources Law (Ley de Recursos Hídricos) and the draft National Water Resources Management Strategy of 2004 (Estrategia Nacional para la Gestión de los Recursos Hídricos Continentales del Perú) contain the necessary elements for Integrated Water Resources Management as stated in international good practices namely, integration of sectoral policies, participation of stakeholders, decentralization of management to the river basin level and recognition of water as a social and economic good. Despite the new law, several key challenges remain, including limited institutional capacity, increasing water stress in the coastal region, deteriorating water quality, poor efficiency in the irrigation sector, as well as inadequate access to and poor quality of water supply and sanitation.

The second half of the 20th century witnessed heavy public investments in dams in the Andes and associated irrigation infrastructure in the coastal region. For example, in the 1950s and 1960s, the San Lorenzo dam and Tinajones dam, the largest Peruvian dams, were built in the northern coastal region. Within the government the Ministry of Agriculture was given the responsibility to manage water resources, since irrigation was by far the largest water use. Its lead role was confirmed by the 1969 General Water Law No. 17752 (Ley General de Aguas—LGA) which defined the Ministry of Agriculture as the "National Water Authority". However, other laws—such as the General Hydrocarbon Law (DL 26221), the General Mining Law (DS 014-92-EM), the Law for Electricity Concessions (DL 25844)—also dealt with water resources on a sectorally fragmented basis within a centralized administrative system that gave little or no decision-making power to stakeholders at the local level. There was no legal basis for integrated water resources management at the level of each river basin, and consequently there were no institutions to implement such an integrated management. This began to change in the early 2000s with the approval of a Decentralization Law, a Regional Government Law and a Municipalities Law. In 2003 the government began transferring powers to the newly created regional governments, including for water quality management and the operation and maintenance of major public infrastructure, despite the limited institutional capacity of regional governments. A draft national water resources management strategy prepared in 2004 (Estrategia Nacional para la Gestion de los Recursos Hidricos Continentales del Peru) aimed at promoting integrated water resources management through a new institutional and legal framework. In this spirit a National Water Authority (Autoridad Nacional del Agua – ANA) was established in 2006 and its role was strengthened through the 2009 Water Resources Law (Ley de Recursos Hídricos – LRH). Implementation of the law and the creation of basin-level institutions with meaningful capacities and enforcement powers still remain a challenge. (See Legal and Institutional Framework below for more details)

Peru has a large amount of water resources, with 159 river basins and a per capita availability of 68,321 cubic meters (m³) in 2006. According to FAO the long-run average annual rainfall is 1,738 millimeters (mm). There is significant seasonal variability in river run-offs, two-thirds of which occur between January and April.

The Andes divide Peru into three natural drainage basins: Pacific basin (279,000 km²), Atlantic basin (959,000 km²) and Lake Titicaca basin (47,000 km²). According to the National Water Authority (Autoridad Nacional del Agua—ANA), the Pacific basin has 62 rivers; the Atlantic basin has 84 rivers; and Lake Titicaca basin has 13 rivers. The number of rivers in Peru varies depending on the source of information, because in some cases tributaries are counted as rivers in their own right and in other cases not.

According to ANA, the dry Pacific basin, with 37.4 km³ available per year, accounts for less than 2% of Peru's renewable water resources. Its 62 rivers flowing west from the Andes supply the bulk of the water to the coastal region. Of these rivers, only about 30% are perennial. From 1984 to 2000, the average water availability decreased to 33 km³ per year and from 2003 to 2004 to 20 km³ per year. Agriculture accounts for the withdrawal of 14 km³ per year (or 80% of total water use) and domestic withdrawals account for 2 km³ per year (12% of total water use). The Atlantic basin holds more than 97% of all available water with nearly 2,000 km³ per year. Agriculture also accounts for 80% of water use, while domestic use accounts for 14%. The Lake Titicaca basin receives 10 BCM per year, less than 1% of the total. In this basin, agriculture accounts for 66% of total water use, while domestic use accounts for 30%.

Source: INEI (2007)^{[citation needed]}

External resources of water enter Peru though tributaries of the Amazon, in the Atlantic river basin, supplying 125 BCM annually. The main rivers are Napo, Tigre, Pastaza, Santiago, Morona, Cenepa, and Chinchipe.