This paper analyzes how development cooperation can actively support democratic governance through cooperation in the water sector. To answer this question, we develop an analytical approach based on democratization research and on water governance research. We tested the approach in three donor-supported water projects in Morocco and carried out over seventy interviews with key stakeholders. Our findings show (a) key factors influencing the scope for external support for democratic governance in the water sector, (b) potential negative effects of the support when local elites grasp new resources, and (c) unintended positive spill-over effects of water projects on democratic governance within and beyond the sector (for instance, strengthening formerly marginalized groups). As these empirical findings suggest, there is a potentially large scope of action for supporting democratic governance through water sector cooperation. We therefore highlight the need for more analytical and empirical research on causal interlinkages between these two fields of intervention.