A water allocation mechanism is the combination of institutions which enable water users and water uses to use, take or to receive water for beneficial use according to a recognised system of rights and priorities (Taylor, 2002). It defines who is allowed to access water, how much may be used or taken and when, how it must be returned, and the conditions attached to the use of the water (OECD, 2015). Overall, little work has occurred on the topic at EU level, despite its relevance to water management, as highlighted by European Commission’s 2007 Communication on water scarcity and drought, its 2019 Review of the second cycle RBMPs, and more recently the EU Biodiversity Strategy to 2030 and the EU Adaptation Strategy (issued in 2020 and 2021, respectively) under the European Green Deal. This report, prepared in cooperation with members of the ad-hoc technical group on Droughts and Water Scarcity of the EU Common Implementation Strategy (CIS) for the Water Framework Directive (WFD), reviews the literature and practice for water allocation mechanisms. It identifies key challenges in EU Member States and highlights examples of methods in place. Because of the lack of previous EU exchanges on the topic of water allocation, there are currently different understandings of the concept and of its role in water management under the WFD. Furthermore, national contexts vary significantly, as water allocation has been in place for a long time in some of the EU Member States, whilst for others it is a new field of water management. Sharing success stories and examples of progress is difficult, as often the process of implementing water allocation has just started or not yet ready for presentation to other water managers, experts and the public. Member States face currently several challenges when implementing water allocation mechanisms.