The report looks critically at the water resources and the current and projected future water demands in the Southern Gobi Region (SGR) using the widely dispersed data and information that are currently available. An important conclusion of the report is that almost all the significant sources of groundwater in the SGR are 'fossil' or 'non-renewable', meaning that they are finite resources which cannot be replenished. Not only will that, but pumping water out of these fosil aquifers tend to cause a drop in the groundwater levels above them. The report proposes practical steps by which water resources development and management could be managed to best serve economic and infrastructure development while giving attention to environmental protection and service to communities in the SGR. The report also highlights the urgent need for more data. A more detailed picture of the distribution and quantity of the groundwater would give planners first, a better idea of both the limits to the growth of the SGR; and, second, of the future water demands, its spatial distribution, quality requirements, and the possibilities to increase water use efficiency and water re-use. Thus there is a need to bring all information and data together to form the basis for rational planning.