This paper reports on the socio-economic assessment carried out for the transboundary diagnostic assessment (TDA) of the Okavango River Basin. It formed part of an environmental flows assessment (EFA) which included hydrological, biophysical and socio-economic elements, and which measured the likely impacts of water use developments on flows and flow-related natural resources, livelihoods and incomes. Empirically based natural resource use models were used to value all livelihoods and income generated from river/wetland-related natural resources use in the basin. These data were combined with the EFA model to measure the likely effects of flow change on these values. The Okavango river basin is thus far relatively unaffected by development. Human populations in the basin tend to be poor and rely significantly on natural resources for their livelihoods. River/wetland-based natural resources contribute significant proportions of the household income of basin residents (19% in Angola, 32% in Namibia and 45% in Botswana). They contribute US$60 million annually to livelihoods in the basin as a whole (US$4.4 million in Angola, US$12 million in Namibia, and US$44 million in Botswana). Their direct contribution to national incomes amounts to US$100 million annually, and their total economic impact amounts to some US$234 million annually. These values are derived mostly through tourism in the lower parts of the basin, but households also directly benefit from fish, reeds, wetland grass, wetland grazing and wetland crops. Future water use developments, in the upper parts of the basin, will significantly reduce these flow-related incomes. Major development of water uses might cause long term economic losses amounting to US$65 million in Angola, US$330 million in Namibia, and US$2.1 billion in Botswana. Such water use development might reduce average household livelihoods income by 9% in Angola, 13% in Namibia, and 32% in Botswana. Planning for future development in the basin needs to take these findings into account. Macro-economic cost-benefit analysis should be applied to ensure that basin development minimises such losses and contributes optimally to national welfare.