Though the roles of water were impressive, little was known on its impacts towards poverty reduction. This study examined the role of small water projects in poverty alleviation. It was done in Mvomero district. It used a cross-sectional design and survey to collect data. Multistage sampling was used to obtain the sample of study. Data analysis was done by using SPSS, in which Descriptive statistics and PCA were used. The study identified irrigation; livestock; aquaculture; food canteens; selling water and cold drinks; bricks making; and local brew production as the main water projects in the area. The projects contributed to the creation of employments and income. However, these projects faced the problems of weather change, lack of fuel, shortage of arable land, lack of pesticides and fertilizers and poor irrigation infrastructure. The study recommended stakeholders in water projects to diversify their economic projects; find alternative fuel sources; practice afforestation; the projects of food canteen involve health monitoring; and farmers form groups to manage their own irrigation schemes.