Indigenous land owners of the Tiwi Islands, Northern Territory Australia have begun the first formal freshwater allocation planning process in Australia entirely within Indigenous lands and waterways. The process is managed by the Northern Territory government agency responsible for water planning, the Department of Natural Resources, Environment, The Arts and Sport, in partnership with the Tiwi Land Council, the principal representative body for Tiwi Islanders on matters of land and water management and governance. Participatory planning methods ('tools') were developed to facilitate community participation in Tiwi water planning. The tools, selected for their potential to generate involvement in the planning process needed both to incorporate Indigenous knowledge of water use and management and raise awareness in the Indigenous community of Western science and water resources management. In consultation with the water planner and Tiwi Land Council officers, the researchers selected four main tools to develop, trial and evaluate. Results demonstrate that the tools provided mechanisms which acknowledge traditional management systems, improve community engagement, and build confidence in the water planning process. The researchers found that participatory planning approaches supported Tiwi natural resource management institutions both in determining appropriate institutional arrangements and clarifying roles and responsibilities in the Islands' Water Management Strategy.