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Water resources are important for the production of woody biofuel feedstocks. It is necessary to ensure that production systems do not adversely affect the quantity or quality of surface and ground water. The effects of woody biomass plantations on water resources are largely dependent on the prior land use and the management regime. Experience from both irrigated and non-irrigated systems has demonstrated that woody biofuel production systems do not impair water quality. Water quality actually improves from conversion of idle or degraded agricultural lands to woody biomass plantations. Site water balance may be altered by cultivation of woody biomass plantations relative to agricultural use, due to increases in evapostranspiration (ET) and storage. Incorporation of woody biomass production plantations within the landscape provides an opportunity to improve the quality of runoff water and soil conservation. Given the centrality of water resources to the sustainability of ecosystem services and other values derived, the experience with woody biofuels feedstock production systems is positive.