The rivers Sava and Kokra have shaped the image of Kranj for centuries. Sava offered particularly favourable conditions for the development of various economic sectors, with mills, leather workshops, and dyeworks operating along the river. However, during the modernisation process, only a handful of workshops were able to keep pace with the technical progress and develop into industrial enterprises. The present contribution examines the importance of water power for the integration of machine production in the first period of industrialisation. In Kranj, in the first half of the 19th century, thick woollen blankets were made by two companies in Lajh near the river Sava using water-powered steam engines. In the last quarter of the 19th century, the right to use water power was a hot topic of debate among the enterprising bourgeoisie. The rather prominent Majdič mill operated next to the bridge over the river Sava, and the water supply was increased to accommodate a larger turbine, which threatened the smooth operation of the water pumps supplying the city. Pollak’s leather factory at the confluence of Sava and Kokra also developed into a major industrial plant. The new leather factory had its own power plant, which is still in operation today. After World War I, the new municipal leadership sought investors for new industrial plants to revitalise Kranj’s economy. The ability to generate electricity in the immediate vicinity was crucial to the operation of the factories. The city therefore supported Vinko Majdič’s plans to convert the former mill into a power plant. Before World War II, Kranj’s rapidly developing industry already included eight large and medium-sized textile factories, two shoe factories, a rubber factory, and many smaller workshops. Most of the facilities were located along the river Sava, which was the centre of industrial development in the course of the 20th century.