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Water tunnels are emerging as a possible useful alternative to small low-speed wind tunnels for an expanded range of aerodynamic testing. In this report, an assessment is made regarding the extent to which water tunnels can be used for such testing. It was found that their suitability for testing given models needs to be assessed on a case-by-case basis. For conventional tests on aircraft, such as force and moment measurements, they compare unfavourably with similar-sized wind tunnels, due to a mismatch in Reynolds numbers. Water tunnels are generally better suited to carrying out fundamental research than they are for applied aerodynamics testing. However, they are very useful as part of a large research program, by helping establish the testing schedule for large wind tunnels. In flow situations that are insensitive to Reynolds number, or where a test Reynolds number is close to that of a full-size vehicle, water tunnels should be regarded as the preferred option for experimental aerodynamics. Such examples include micro air vehicles, high-rate dynamic testing, and high-sweep sharp-edge configurations. Water tunnels are also very useful for providing validation data for computational-fluid-dynamics analyses of a flow. An earlier version of this work was prepared for the TTCP TR-AER-TP5 Panel in August 2010