Australian governments have purchased large volumes of water from irrigators to decrease the amount of water diverted for agriculture to improve the health of the Murray River. Irrigation entitlements ‘bought back’ are managed by government agencies and are broadly described as ‘environmental water’. The water reform process, the volume of water bought back from irrigators and the objectives and application of environmental water are all contested by irrigators and local communities. This paper provides the first examination of the social acceptability of environmental water in Australia with a case study of Gunbower Island on the Murray River using a survey of local stakeholders. Most respondents visited Gunbower Island regularly, placed a high value on the island and were committed to maintaining the health of the island. Nevertheless, respondents were more likely to exhibit unfavourable judgements about environmental water. Positive judgements were associated with pro-environmental values, belief in the benefits of environmental water and higher levels of trust in the managing agency. Findings provide insights about how the key agency can improve the social acceptability of environmental water in Gunbower Island, including a greater focus on on-ground work as an opportunity to engage local people in learning and action.