This paper presents the water management plan of the Mae Moh Project in the North of Thailand, which includes a large lignite opencast mine and thermal power plants. Lignite production will increase from the present 5.5 million tons per annum to approximately 20 million tons per annum by 1995 when the pit area will be about 20 sq.km. and the depth at over 300 meters. Seven power plants are proposed of which two are under construction. The total capacity to be installed is 2,925 MW. The principles considered for water management are firstly flood protection, including drainage of the mining pit and diversion of the Mae Moh stream away from proposed future mining areas; and secondly, a plan to meet the water requirement of the thermal power plants, while maintaining downstream supplies for irrigation and other purposes. The limited annual run-off of Mae Moh and Mae Chang watershed basins are inadequate for the proposed power plants. A study has been prepared to compare two approaches, namely conveying water from remote watersheds to meet the water requirement of the power plants up to total installed capacity; or by limiting future total generation, at the existing site, to only 2025 MV.