Many factors operate to influence the relation between competition for water and its efficiency of use. Careful attention must be given to definition of boundaries, terminology, etc., if meaningful relations are to be obtained in specific instances. An appreciation for the interconnection of all natural waters together with their variable and mobile characteristics is needed. A recognition of the effect of legal and institutional mechanisms which modify the relation between competition and water use is required also. Specific examples illustrate both favorable and adverse effects of competition on efficiency of water use.