The polluter’s pays principle, as widely propagated in international environmental law, has been universally accepted as one of the cardinal principle of both international and national environmental law. The principle is to the effect that all subjects of international law, states and non states actors like individuals and multinational companies, will be held liable and obliged to offer compensation for the damage they have caused the environment and its subjects to suffer.In light of the above, the international regime for liability and compensation for vessel-sourced marine oil pollution has been established. The purpose of this regime is to ensure that as a result of vessel-sourced marine oil spills, the resultant environmental damage is restored and affected individuals are compensated respectively. The regime currently consists of the Civil Liability Convention 1969, the Civil Liability Convention 1992, the Fund Convention 1992, the Bunker Convention 2001, and the 2003 Protocol to the Fund Convention.Tanzania is a party to some of the above mentioned international conventions. As a dualist state, it has enacted the Merchant Shipping Act 2003 to implement the international regime. The country also has an Environment Management Act 2004, which among others, upholds the polluters pays principle. Thus in order for this system of liability and compensation to work, both the International and national regime ought to be in coherence with each other. However, both the international as well as Tanzanians legal regime that implements the former are without flaws which scholars have contextualised as legal issues, which may impede the amount and scope of damages that may be compensated.In this thesis, the author will delve on a number of legal issues affecting liability and compensation as a result of vessel-sourced marine oil pollution in Tanzania. The legal issue to be discussed are derived from the international regime and the Tanzanian domestic regime. This inter-alia shall consists of the following; the definition of ship, definition of environmental damage, scope of compensation (economic and ecological compensation), locas standi, assessment and quantification of damage, limitations and exemptions to liability, recognition and enforcement of judgement well as the effect of lack of participation in some of the related international conventions. Having expounded on the above identified legal issues, the author draws a conclusion and makes suggestions that will improve the Tanzanian regime for liability and compensation for vessel-sourced marine oil pollution.