Inland waterway navigation in comparison to other transport branches such as road, rail, air and maritime traffic for many years has been neglected, but lately thanks to its development, there has been a need for unification of regulations on inland navigation. This paper deals with the analysis of the liability of carriers of inland waterway navigation for cargo damage. The initial part of the work focuses on the theoretical part of features and characteristics of the inland waterways and discusses the relevant concepts such as inland waterway navigation, inland waterway carrier, responsible persons for the cargo damage as well as what is exactly meant by damage to the cargo. Furthermore, the significant advantages that inland waterways are offering are also mentioned. Since the carrier’s responsibility of the inland waterway navigation for the cargo damage is the main theme of this work, the greatest attention is given to this exact matter. The above mentioned carrier’s responsibility is analyzed from the aspect of the current Budapest Convention on the contract for the carriage of goods by inland waterways as positive legal source, both at the international level and the level of the Republic of Croatia. At the same time, through the work there is given a comparison of the Budapest Convention and its provisions concerning the liability of the carrier for cargo damage with the relevant conventions of other transport branches since the Budapest Convention is considered to be a compromise convention between land and maritime transport.