The Mekong River system provides a crucial source of natural resources for riparian nations. However, the increasingly rapid pace of hydro-development in the Mekong Basin is threatening the integrity of the river system, posing a real concern for Lower Basin states, which are particularly dependent on the basin. This scenario has led to warnings of armed conflict, or even ‘water war’, between riparian states. Certainly, the expanding scale of hydro-development can be expected to continue increasing interstate tensions in the Mekong region; but are these tensions really likely to escalate to armed conflict? This paper explores this question by drawing on the water and conflict theory of Aaron Wolf. Ultimately, this paper concludes that interstate tensions over Mekong hydro-development are unlikely to generate armed conflict. This is in part due to the strategic impracticality of such a conflict as well as the presence of a river basin management institution. Most compellingly, though, armed conflict is unlikely because the economic imperative shared by Mekong states is better served by cooperation – or at least non-interference – than conflict, over regional hydro-development. In closing, the paper urges that the study of water and conflict in the Mekong Basin be refocused at the intrastate level.