Effective sustainable natural resource management asks for an integrated approach to allow the involvement of actors in the management process. This paper intends to measure willingness to pay (WTP) and its determinants for watershed conservation,and then link it to the calculated costs of conservation. A cross-sectional data from 200 households residing in Igunga town are analysed using the probit model. The key findings show that, on average, households are willing to pay TZS4,920 per month,

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... hich approximately equals TZS260m per year, for the entire number of households in the area. The WTP would cover the calculated cost of conservation, which approximately equals TZS233m per month by more than 100%. Factors that influences WTP positively includes household income level, household head's number of years of schooling, and house ownership. On the other hand, the price of water per 20 litres and outbreak of water-related diseases decreases household WTP. The implication from the study findings is that, effective conservation of watershed in the study area would require, to large extent, community participation. Policies geared towards improving household income and education access would further benefit water resources management in the area. Keywords: integrated water resources management, willingness to pay, conservationcosts, Tanzania