Water markets have many advantages for water reallocation. However, water markets do not always function efficiently because the property rights structure was not designed for market transactions. The potential for successful markets can be determined by looking at the 10 fundamental questions relevant to water rights. The questions are relevant to any system of water rights, but the examples used are largely from the western United States. The questions are designed to raise issues about the basic structure of a water rights system. After discussing these issues, the paper turns to recommendations on how a water rights structure could be modified to facilitate markets. The recommendations are not meant to be an end point but are intended too stimulate discussion.