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A new method for determining feasibility and prioritizing investments for agricultural and domestic recharge dams in arid regions is developed and presented. The method is based on identifying the factors affecting the decision making process and evaluating these factors, followed by determining the indices in a GIS-aided environment. Evaluated parameters include results from field surveys and site visits, land cover and soils data, precipitation data, runoff data and modeling, number of beneficiaries, domestic irrigation demand, reservoir objectives, demography, reservoirs yield and reliability, dam structures, construction costs, and operation and maintenance costs. Results of a case study on more than eighty proposed dams indicate that assessment of reliability, annualized cost/demand satisfied and yield is crucial prior to investment decision making in arid areas. Irrigation demand is the major influencing parameter on yield and reliability of recharge dams, even when only 3 months of the demand were included. Reliability of the proposed reservoirs as related to their standardized size and net inflow was found to increase with increasing yield. High priority dams were less than 4% of the total, and less priority dams amounted to 23%, with the remaining found to be not feasible. The results of this methodology and its application has proved effective in guiding stakeholders for defining most favorable sites for preliminary and detailed design studies and commissioning. (C) 2014 Published by Elsevier B.V.