This study investigates provisions made within institutional and regulatory frameworks of water resources management to enhance multi-stakeholder relationships and the challenges of maintaining those relationships, and implications of water resources management for rural communities in the Densu River basin, Ghana. The primary objectives of this study were four fold, these are to: i) review the existing regulatory framework and how it promotes or hinders multi-stakeholder relationships within the catchment area; ii) examine multi-stakeholder relationships to identify challenges in promoting effective collaboration in water resources management; iii) explore the impacts of catchment management on the livelihoods of rural communities; and iv) generate a model that best or appropriately conceptualizes relationship mechanisms within the framework of water governance. The study employed a mixed methods approach which included data collected through reviewing regulatory and policy documents, key informant interviews, observation, and a household survey of 327 respondents. The results indicate that provisions are made within the existing institutional and regulatory framework to foster multi-stakeholder inter-relationships in the water resources management in the Densu River basin. The management of the Densu River basin is guided by a number of regulatory mechanisms that are scattered within different institutions. The regulatory mechanisms are seen as the instruments for building and maintaining multi-stakeholder relationships, but some have become a source of conflict among stakeholders, posing threats to water resources management in the Densu basin. The findings show that several issues hinder effective multi-stakeholder inter-relationships in water resources management in the Densu River basin. These issues include colonial legacies embedded within institutions, institutional challenges, and political processes. Despite the adoption of integrated water resources management (IWRM) some institutions still hold on to the old water resources management arrangements instituted during the colonial era, creating challenges for effective institutional collaboration. Additionally, institutional challenges such as limited financial and human resources, corruption, high attrition rate, and lack of integration of projects and programs are also threatening multi-stakeholder inter-relationships. The political processes at the district assemblies that determine representatives on the Densu Basin Board were also identified as posing significant threat to building effective multi-stakeholder inter-relationship for water resources management in the Densu River basin. The findings further indicate that a number of uncoordinated catchment management strategies such as restrictions on farming areas, bans on illegal mining and logging, and others strategies have been instituted in the upper Densu basin to prevent degradation of the river. However, these strategies are having significant socioeconomic impacts on the local communities. A majority of residents are aware and comply with the enforcement of the strategies, but some are quite reluctant to adhere to them because of increasing economic hardships. This situation threatens the successful implementation of the strategies and the overall protection of the river. Other residents, however, have adopted alternative strategies (expanding petty trading, farming improvement, multiple jobs and others) to cope with the increasing economic hardships as a result of the enforcement of the catchment management strategies by the government.