Water scarcity is a major factor limiting food production. Improving Livestock Water Productivity (LWP) is one of the approaches to address those problems. LWP is defined as the ratio of livestock’s beneficial outputs and services to water depleted in their production. Increasing LWP can help achieve more production per unit of water depleted. In this study we assess the spatial variability of LWP in three farming systems (rice-based, millet-based and barley-based) of the Gumera watershed in the highlands of the Blue Nile basin, Ethiopia. We collected data on land use, livestock management and climatic variables using focused group discussions, field observation and secondary data. We estimated the water depleted by evapotranspiration (ET) and beneficial animal products and services and then calculated LWP. Our results suggest that LWP is comparable with crop water productivity at watershed scales. Variability of LWP across farming systems of the Gumera watershed was apparent and this can be explained by farmers’ livelihood strategies and prevailing biophysical conditions. In view of the results there are opportunities to improve LWP: improved feed sourcing, enhancing livestock productivity and multiple livestock use strategies can help make animal production more water productive. Attempts to improve agricultural water productivity, at system scale, must recognize differences among systems and optimize resources use by system components