Transboundary rivers—the Irtysh and the Ili—constitute vital sources of drinking water, irrigation, and energy production for Kazakhstan. Their upstream origins in China confer distinct hydropolitical and geopolitical significance. This study investigates Kazakhstan’s hydropolitical challenges and water security concerns in its interactions with China, analyzing the factors that undermine the sustainable management of shared water resources. The central research question is: “How do Kazakhstan’s dependence on China’s upstream water flows and the absence of a binding institutional framework affect the country’s water, economic, and environmental security?”The study’s hypothesis posits that: “The lack of a binding institutional mechanism, combined with China’s control over upstream water resources, intensifies hydropolitical tensions and threatens Kazakhstan’s water, economic, and environmental security.” The findings indicate that China, through its geographical leverage, material capabilities, economic bargaining power, influence, has reduced water inflows to Kazakhstan and consolidated its hydropolitical hegemony. This dynamic heightens Kazakhstan’s vulnerability in water resource management, diminishes water security, and jeopardizes environmentally and economically sustainable development. It also discourages the raising of sensitive issues—such as limits on water extraction—to avoid jeopardizing China’s regional investments. The results further underscore that establishing institutional mechanisms, strengthening transboundary water diplomacy, and adopting multidimensional approaches to water resource management can mitigate the risks posed by upstream hegemony and enhance Kazakhstan’s security and sustainable development.