The Arab region needs a new generation of policies and investments in agricultural water. Agricultural water management has always posed challenges and opportunities in the Arab world. However, unprecedented and accelerating drivers such as climate change, population growth, and land degradation make agricultural water management a more urgent priority than ever before. In addition, as part of the 2030 UN Agenda for Sustainable Development, Arab countries have committed to work towards an ambitious set of development targets, the Sustainable Development Goals (SDGs). Unless the right policies and investments are put in place, it will be difficult to achieve the SDGs, including ending hunger and providing clean water and sanitation for all. This paper is part of an ongoing collaboration between the Food and Agriculture Organization of the United Nations (FAO) and the International Water Management Institute to foster dialogue on agricultural water policies and investments in the context of the FAO led Regional Water Scarcity initiative. The purpose of the paper is to frame the key challenges and opportunities in the sector – including emerging innovations in digital agriculture, water accounting, water supply and wastewater reuse – and to lay out broad strategic directions for action.