In 1998 the Washington State Legislature enacted the Watershed Planning Act, which encourages local governments to develop watershed plans using collaborative processes. Objectives of the statute are to address water resource and water quality issues, salmon habitat needs and to establish instream flows. This exploratory study sought to examine two aspects of how local governments are implementing the Act: challenges and benefits associated with collaborative watershed planning and the capacity of local governments to conduct collaborative watershed planning. Using documents and interview data from four cases, it was found that all planning groups experience similar challenges, although newer planning groups experienced more challenges than groups with previous planning experience. Challenges include issues surrounding the collaborative process, interagency co-ordination and trust. Local governments struggle with building capacity to plan, particularly in the areas of funding, technical expertise, incenti...