Over the past twenty years water reform has moved to clarify water rights and responsibilities among users, separated water and land management, and introduced markets. Most recently water policy has clearly recognised the need for environmental allocations to ensure sustainability. These reforms, especially the last, have created conflicts between stakeholder groups. While these conflicts have been couched on many occasions as irrigation versus conservation, this paper shows that the basis of these arguments lies in tacit differences in the constructed meaning attached to the environment by different stakeholders. This article explores the differences between how government managers, scientists and nongovernment stakeholders like irrigators, foresters, croppers and graziers, as well as Aboriginal elders view the environment. Our study is based on interviews with government managers responsible for water management and rural non-government stakeholders in two case study sites in the Murray-Darling Basin where water reform has caused vigorous debates. The findings of this study show that scientists and government managers tend to see the environment as the passive recipient of human impacts; problems best addressed by objective science. In contrast landholders see themselves as active agents within the environment and place much more emphasis on personal experience and local knowledge. These world views influence people's reactions to water policy but are rarely explicitly discussed or acknowledged which results in unnecessary conflict in public debate. Understanding the government and landholder perspectives is essential as a foundation for effective collaborative planning.