Water-management practices in the Vietnamese Mekong Delta have predominantly focused on structural development (e.g., dykes) to support rice-based agricultural production. Given the existing conventional approach, however, many of these efforts have been rendered ineffective . This study adopts the policy transfer concept to investigate how the participatory approach is introduced into the local institutional system, and how it shapes the construction, operation and management of the North Vam Nao scheme. Results suggest that this allowed stakeholders to engage collaboratively in these processes. The study contributes an empirical understanding of how policy transfer enhances institutional capacity for water resources management in the delta.