Agriculture is the largest consumer of water and total evapotranspiration from global agricultural land could double in next 50 years if trends in food consumption and current practices of production continue. There is an imminent need to improve the water use efficiency or more importantly the water productivity. This chapter explains in detail the concept and measurement of ‘water-use efficiency’and ‘water productivity’as applied at plant, field, farm, region/sub-basin, basin and national level through traditional and remote sensing based estimations. Further, the methods for improving water productivity under irrigated, water scarce conditions, paddy fields and large river basins are discussed. The discourse has a special focus towards better understanding and employing the water-nutrient interactions for improving water productivity at all levels. The complexities of measurement and strategies for improvement of physical or economic water productivity increase as the domain of interest moves from crop-plant to field, farm, system, basin, region and national level. Achieving synchrony between nutrient supply and crop demand without excess or deficiency under various moisture regimes is the key to optimizing trade-offs amongst yield, profit and environmental protection in both large-scale commercial systems in developed countries and smallscale systems in the developing countries. Appropriate water accounting procedures need to be put in place to identify the opportunities for water savings. As pressure on the available land and water increases, higher water productivity is the only solution to providing the food that will be needed with the water that is available.