Kerala has a rich source of inland waterways, which can be used for the betterment of the state and country. One side of Kerala has a stretch of coastal line of the Arabian Sea and when it comes to the inland areas, the National Waterway 3 lies parallel to the Arabian Sea from Kollam to Kozhikode. This study deals with the actual potential of National waterway 3 which plays a prominent role in the commutation of goods and people. The inland waterways are the healthiest option in contrast to roads and railways, however it’s actual potential remains invisible for most people. The possibility of national waterway 3 is much higher if we deal with it in a better way. This study deals with the facilities, potential, relevance and challenges faced by the national waterway 3 and is presented from the information based on secondary data and information has been sourced from various books, trade journals, government publications newspapers and observations. Keywords— National waterway, Inland, Coastal