Water resources are under dire social, economic and environmental threats, especially in developing countries. Stakeholders' participation in water resource management is widely advocated to address these needs but its outcomes are difficult to trace. The concept of IWRM is advanced as a framework to reform water governance that aims to tackle conflicting interests between stakeholders' and water-related sectors. Using qualitative field data from the rainfed desert region in Matruh, Egypt, the paper evaluates the contribution of small-scale stakeholders' participation in advancing IWRM with the variables of equitable allocation, empowerment and sustainability. This paper analyses whether stakeholders' participation fosters a sustainable use of natural resources. It argues in its case study that the political processes of water management are rarely considered in IWRM. Consequently, equity and empowerment gains are captured by power differentials. This constrains its potential for sustainability. By doing so, it expands the literature on IWRM from a political sociology angle.