The term “water diplomacy” has gained currency among policy makers and academics. It reflects an awareness that the use, management, and protection of transboundary water resources is intrinsically political and often embedded in complex political settings. Based on a review of academic and policy documents, we analyze the variety of understandings and common patterns in the definition of water diplomacy. We also analyze tools, tracks, and levels through which and at which water diplomacy is conducted or analyzed. With our own definition of water diplomacy as deliberative political processes and practices of preventing, mitigating, and resolving disputes over transboundary water resources and developing joint water governance arrangements by applying foreign policy means which are embedded in bi- and/or multilateral relations beyond the water sector and taking place at different tracks and scales, we aim to advance the discourse on water diplomacy both in the academic and policy realms.