This paper analyses the effectiveness of traditional water governance in Flood-based Livelihood Systems (FBLS), which harness floods that could have caused environmental degradation. Ostrom’s Governing the Commons Principles, widely recognized for the effective management of shared resources, is used as a framework. The paper draws from discussions with 300 farmers and pastoralists in Tana River FBLS, the oldest traditional system in Kenya. The traditional floodwater governance does not satisfy Ostrom's Principles and livelihood needs. Small-scale farmers and pastoralists frequently experience floodwater scarcity while large-scale farmers use excessive floods often causing waterlogging. This floodwater sharing disparity generates conflicts and threatens small-scale farmers’ and pastoralists’ livelihoods. Large-scale farmers are primarily concerned with inadequate floodwater management infrastructure that hampers maximizing their harvest. For increased sustainability and equity, fairer floodwater sharing systems and enforcing institutions should be introduced before infrastructural development. These lessons from Tana River can contribute to a larger livelihood potential for flood-based agriculture globally.