This article demonstrates how the availability of seawater desalination is important, not just as an additional source of water supply on a national scale, but as a potential ‘game changer’ in transboundary hydro-political interactions. The advent of desalination can change the nature of relations from a zero-sum game based on resource capture to a mutually beneficial business-like relationship typical in international commodity trade. It also allows for flexibility in policy approaches, and challenges the advantages and disadvantages hitherto thought of as inherent in upstream–downstream relations. This has wide ramifications for possible cooperation and conflict over international shared water resources. This study analyses the possible implications of desalination on hydro-politics, and then presents a case study of the hydro-political relations between Israel and Jordan in order to demonstrate how different aspects of transboundary political interactions are already being affected by the development of desalination. It demonstrates the ways in which the option of desalination allows states to pursue both unilateral and collaborative policies that were not practical in the period prior to desalination. The paper concludes by emphasizing the need for a revised analytical paradigm for analysis of hydro-politics in light of the development of desalination.