The increase in the consumption of animal products is likely to put pressure on the world’s freshwater resources and water scarcity can pose threat to sustainable development. Dairy farming is a water intensive activity involving not only direct consumptive water use as drinking and cleaning water for animals, but also indirect water embedded in the feed. Water footprint can be used as a tool for sustainable dairy farming. Water footprint calculates the total volume of water used to produce the milk, including direct and indirect use. Water Footprint of milk depends on feed conversion efficiencies, feed composition and feed origin. Feed production contributes maximum to the water footprint. Improving feed conversion efficiencies of dairy animals, improving water use efficiency in milk production and agricultural practices can help in reducing water footprint. Virtual water trade between nations can also be promoted to improve global water use efficiency.