Water scarcity and water pollution pose a critical challenge in many countries around the world. In the light of this, there is an urgent need to improve the efficiency of water consumption, and to supplement the existing sources of water with sustainable alternatives. One of such alternatives, wastewater reuse, has become increasingly important in water resource management for both environmental and economic reasons. In developing countries, however, wastewater reuse generally occurs within the informal arena, which means that untreated wastewater (or diluted wastewater) is used for irrigation. Such use represents risks for the health of the people (farmers and consumers) and the environment. In contrast, in developed countries these risks have been recognized and formal institutional arrangements have been established for wastewater reuse in agriculture. Such formalization implies planned and controlled use of treated wastewater. In this way risks are reduced, while still benefiting from an additional water source. This paper discusses the institutional settings for wastewater reuse in agriculture in four different countries: Israel, South Africa, India and Bolivia. Each of these countries represents a step along a trajectory of formalization of wastewater reuse, i.e. from informal towards formal use of wastewater. The purpose of this comparative analysis is to gain insight in the process of formalization of wastewater reuse by identifying key drivers, constraints and institutional arrangements influencing this process. The analysis of the institutional settings is framed within the Institutional Decomposition Analysis (IDA) framework proposed by Saleth (2004), and looks at three components of water institutions, namely, water law, water policy and water administration/organization. The information for this paper was collected through a literature review that includes peer-reviewed articles, official reports, official websites, books and grey literature. For Bolivia, India and South Africa, this information was furthermore complemented with semi-structured interviews with local stakeholders, conducted in different periods in the years 2013 and 2014. The study shows that key factors determining formalization of wastewater reuse include: water scarcity, public pollution prevention awareness, an effective policy and regulatory framework, and a capital-intensive water use linked to profitable markets. Wastewater offers a window of opportunities for water resources management, particularly for the agricultural sector. Countries can benefit enormously from this, but formalization of water reuse is required because it will guarantee that people enjoy the benefits while they are protected from the risks of wastewater reuse.