Sri Lanka has the small hydropower potential of about 400 MW and the government encouraged and facilitated private sector entrepreneurs to undertake the development of small hydropower ventures with flexible power purchasing agreements as the country has already tapped almost every potential sites for large hydropower development. A request was made by the Mahaweli Authority of Sri Lanka (MASL) to Water Resources Science and Technology (WRST) through International Water Management Institute (IWMI) to examine whether there is a significant impact of construction and operation of small hydropower plants or so-called mini-hydro on hill stream fish fauna. The preliminary investigations revealed that there is an escalating development of mini hydro with least concern for stream environment, especially on hill stream fishes endemic to the country although, Sri Lanka is identified as a biodiversity hotspot with rich endemic fish fauna, confined to hill streams. There are several cascades of mini-hydro in major rivers. In most cases, dead river beds occur between the weir and the powerhouse. The study was further extended to examine the entire headwater streams network of the country with the help of a competitive grant awarded to the WRST by Asia-Pacific Network for Global Change Research (APN). Among the several activities on building awareness of civil citizens and public officers on this issue, it was proposed to write a handbook entitled ͞“ŵall Hydropower and Environment – A Case Study on Sri Lanka.͟ The handbook is compartmentalized into ten chapters and a concise glossary and a bibliography covering the reference materials. An enormous amount of literature is available on small hydropower development highlighting both financial and technical aspects. Adverse environmental impacts and social problems have also been analyzed in different angles. While there are many taboos in developed countries to restrict and regulate the establishment of small hydropower concerning the environment and social requirements, there is a rapid and shocking trend in the exploitation of hill streams in developing countries including Sri Lanka. Since it is a very lucrative venture, entrepreneurs are not reluctant to invest on small hydropower although the process is very stringent and corrupted to a greater extent. The primary objective of this handbook is to build up the awareness of the non-subject specialists who are engaged and responsible for different activities of small power development. Further, it is anticipated that the developers also understand the importance of evolutionarily established natural processes and functions to sustain the ecosystem balance. Of course, socio-economic development to improve the quality of life and, in turn, the well-being of the human being is utmost important. Nevertheless, there is a right and necessity to protect the other living beings on this planet earth for our survival. Therefore, care should be taken when over-estimate and over-emphasis on technologically biased and politically motivated development activities are planned to over-exploit natural resources. Finally, we conclude this handbook requesting the relevant authorities and other stakeholders to adopt appropriate strategies and guidelines in par with the developed nations when physical plans are drawn to exploit hill streams for the development of small hydropower since the conservation of aquatic biodiversity and the protection of livelihoods of riparian communities is equally important.