“This paper examines some of the different ways in which Phase IA and B of the LHWP impacted on the livelihoods of the communities in Lesotho, and how these impacts have policy implications for sustainable development and livelihoods for SADC member states. The paper is divided into five sections: section one is the introduction; section two presents a conceptual overview on dams and sustainable development and livelihoods; section three presents the impacts of the LHWP on communities and their livelihoods; section four is a critical interrogation of the impacts of the LHWP and their policy implications for sustainable development for SADC member states; and section five provides the conclusion. Dams have become an increasingly contested terrain in development discourse, prompting the United Nations (UN) to establish the World Commission on Dams (WCD) and adopt its Report in 2000. The bone of contention is whether dams promote or hinder sustainable development and livelihoods of the dam impacted areas and communities; and what needs to be done as mitigation of the dam impacts. This paper uses desktop methodology to explore the experiences of the Lesotho Highlands Water Project (LHWP) on sustainable livelihoods of its dam impacted areas and communities, and suggests policy implications for sustainable development in the Southern African Development Community (SADC). The paper concludes that the project failed to promote sustainable livelihoods in the dam impacted areas and communities, and proposes that SADC member states should not only make dam policies but enforce them, in order to guarantee that dam impacted areas and communities have better livelihoods.”