Aegean Islands in Greece, mainly the Dodecanese and Cyclades, face a serious problem of water scarcity. The situation has deteriorated over the last years due to the continuous and fast growing tourist development. Moreover, salty water intrusion into the aquifers is seriously threatening the quality of the existing water reserves. In many and islands water is transported by sea, at a considerably high cost (reaches about 5-8 EURO/m(3) in some cases) with a tendency to further increase due to rises in the cost of fuels, inflation, etc. Desalination is foreseen as a solution to this problem as it is a process which can provide fresh and potable water in the required quantities, at a much lower cost. This paper presents the current status in Cyclades and Dodecanese, existing water demand and transported quantities of water, and the desalination units that exist in the Aegean Islands. Furthermore, we estimate costs and the associated efforts that are required for the installation of small desalination plants producing useful amounts of fresh water for local needs.