The district is blessed with rich water resources. There are east flowing and west flowing rivers in the region, thanks to the peculiar terrain of the district interspersed with both very high and medium hills, valleys and meadows. One of the major rivers in the district is Kabani River, a tributary of River Cauvery; it is also one of the only three east flowing rivers in Kerala. Kabani has many tributaries including Thirunelli River, Panamaram River and Mananthavady River. All these rivulets help form a rich water resource as well as a distinct landscape for the district.
There is a perennial lake called Pookot Lake which also forms the origin for the rivulet, Panamaram. Various streams flow into the Panamaram rivulet while it passes through the mountain gorges and finally the river falls down into Panamaram Valley. After flowing through the district for a certain distance, River Panamaram joins Mananthavady River, which originates from the lower regions of the peak called 'Thondarmudi'.
From this confluence onwards, the river is known as Kabani and once entering Karnataka state, it joins the river Cauvery.