The article evaluates whether the participatory arrangements in Swedish water management following from the European Union's Water Framework Directive (WFD) contribute to legitimacy by increased learning and knowledge-generation. In contrast to most evaluations of collaborative arrangements, we use a three-tiered approach analyzing actors, processes and structures jointly, which allows us to more fully consider the merits and challenges facing this new management system. Based on original data collected from the Water councils in one of five Swedish Water Districts, we conclude that the prospects for learning and legitimacy-creation in Swedish water management are favorable. Despite the absence of decision-making power, a majority of the participants find the management system overall positive and meaningful, as new knowledge is collected and distributed through the Water councils. Thus, the management processes seem to work in favor of reaching the overarching goal of internal legitimacy, i.e. among the participating stakeholders. The main challenge, following our data, is for the new management system to serve as an arena for broad public involvement. As long as only a small number of stakeholders partake in the Water councils, the potential for creating external legitimacy for this new governance system is limited. [ABSTRACT FROM AUTHOR]