This article examines the international legitimacy of unilateral dam development in an international watercourse from the perspective of international water law. Drawing upon technical analysis over the Harirud River Basin, the article discusses probable negative impacts of unilateral dam development in Afghanistan on downstream Iran and Turkmenistan. Competing claims are analyzed to assess emerging transboundary damage under customary international water law. Applying these insights to the case study, this article explores how legal norms and principles can contribute to transboundary water cooperation. It investigates how equitable and reasonable utilization, as required by the United Nations Watercourse Convention, could be reached and whether current activities are in conformity with international norms. Based on this analysis and in the light of international customary law, the article questions the compatibility of unilateral control and capture of water resources in Afghanistan, particularly through the Salma Dam, with ‘equitable and reasonable utilization’ and ‘no significant harm’ rules. The article also argues that building the Salma Dam results in significant transboundary harm to downstream states. Hence, such harm could be considered as significant transboundary damage. Conclusions point to an understanding of water law as a form of institutional guidance in order to provide a transparent setting for transboundary water cooperation among riparian states.