There is a growing consensus that an approach of integrated water resources management (IWRM) which includes elements of equity, participation, coordination, sustainable development and inclusiveness can act as the way forward for efficient and sustainable development and management of limited water resources and for coping with conflicting demands. The Lao PDR faces a challenge in improving the planning and management of water resources at the same time as accelerating economic development by various sectors (hydropower, agriculture, tourism and transport) is taking place. The aim of the paper is to analyse the IWRM processes and to discuss about the challenges and problems concerning the IWRM implementation towards sustainable development in Lao PDR.