Water governance (WG) plays a crucial role in steering integrated water resources management (IWRM) toward the fulfillment of the Sustainable Development Goals (SDGs), particularly in developing regions. Despite this, substantial challenges hinder effective WG implementation across Asia. This study systematically reviews WG literature in Asia from 2000 to 2020, identifying prevailing challenges and proposing a modified WG framework to encourage policy reform. Utilizing the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) protocol, we searched the Scopus database and additional resources to accumulate comprehensive literature on WG in Asia. We incorporated peer-reviewed articles, gray literature, and institutional reports. These were evaluated based on their relevance to WG in Asia, use of analytical frameworks, and incorporation of performance indicators. The search identified 350 potentially relevant documents, with 145 qualifying for in-depth review after screening through rigorous selection criteria, comprising peer-reviewed articles, institutional reports, and influential gray literature. The literature revealed increasing attention to WG since the SDGs’ inception, with the most significant contributions related to Southeast Asia, South Asia, and East Asia. Critical WG issues identified include transboundary water management, irrigation challenges, water quality concerns, and water–food–energy nexus interdependencies. Predominantly, these issues stem from insufficient legal and institutional frameworks, poor stakeholder engagement, and ineffective cooperation, particularly in cross-border river basins. The analysis frequently employed legal and institutional frameworks, Ostrom’s theory, and OECD guidelines, all pointing to common challenges. We propose a modified WG framework with 13 elements, accompanied by key recommendations. The study underscores the need for an enhanced understanding of WG to support policymakers, managers, and scholars in developing effective WG strategies that align with the SDGs. This research contributes to the literature by providing a synthesized perspective on WG in Asia and a foundation for future governance improvements.