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Access to water is a critical aspect of livestock production, although the relationship between livestock weight gain and water quality remains poorly understood. Previous work has shown that water quality of poorly managed farm dams can be improved by fencing and constructing hardened watering points to limit stock access to the dam, and revegetation to filter contaminant inflow. Here we use cattle weight gain data from three North American studies to develop a cost-benefit analysis for the renovation of farm dams to improve water quality and, in turn, promote cattle weight gain on farms in south-eastern Australia. Our analysis indicated a strong likelihood of positive results and suggested there may be substantial net economic benefit from renovating dams in poor condition to improve water quality. The average per-farm Benefit-Cost Ratios based on deterministic assumptions was 1.5 for New South Wales (NSW) and 3.0 for Victoria in areas where rainfall exceeds 600mm annually. Our analyses suggested that cattle on farms in NSW and Victoria would need to experience additional weight gain from switching to clean water of at least 6.5% and 1.8% per annum respectively, to break even in present value terms. Monte Carlo simulation based on conservative assumptions indicated that the probability of per-farm benefits exceeding costs was greater than 70%. We recommend localised experiments to assess the impact of improved water quality on livestock weight gain in Australian conditions to confirm these expectations empirically. [ABSTRACT FROM AUTHOR]