Water scarcity is a problem of global relevance that is affecting more and more people in the world. Latin America and the Caribbean (LAC) have around 35% of the world’s renewable water resources. However, the management of water resources and inequality in access to water has made water scarcity a problem of growing interest in the region. The reuse of water could be an efficient measure to reduce the demand for water resources in the area. In particular, the reuse of greywater is a simple and decentralized method of water reuse, which would mitigate the impact of the lack of water in isolated or difficult-to-access areas. Using the Aquastat database, water consumption in the world and water availability in LAC were studied. In addition, the regulatory framework for water in LAC countries was studied, with an emphasis on water reuse and greywater legislation. Agriculture is one of the most demanding of water in the world, particularly, in LAC, which demands around 70% of renewable water resources. Furthermore, in LAC, the availability of drinking water in rural areas is lacking, with seven countries having less than 80% access to healthy drinking water. The water regulation in LAC is quite heterogeneous. The most general regulation around water is found in the political constitutions of each country. Some constitutions explicitly indicate access to water as a human right, while other constitutions do not include information in this regard. Although some countries have specific regulations on the reuse of wastewater, there is a general lack of regulations related to the reuse of greywater. In most cases, the term “greywater” is not even defined in the general water and wastewater laws. As of the date of this article, only Chile, Peru, and Brazil have bills to regulate the reuse of greywater, of which only the Chilean is approved. The reuse of greywater could help reduce water demand for non-drinking uses. However, the implementation of greywater treatment systems represents a cost that is difficult to cover, especially in the poorest countries of the region. Countries must improve their public policies to improve the management, use and reuse of water to mitigate water scarcity that severely affects human consumption in the region. The relevance of this study lies in providing a general framework of the water situation in LAC for studies and public policies focused on promoting water reuse as a measure to mitigate water scarcity.