This paper applies the Fully-Focussed SAR (FF-SAR) algorithm to CryoSat-2 full-bit-rate data to measure water levels of lakes and canals in the Netherlands, and validates these measurements by comparing them to heights measured by gauges. Over Lake IJssel, a medium-sized lake, the FF-SAR height is biased about 6 cm below the gauge height, and a similar bias is found at six sites where CryoSat-2 crosses rivers and canals. The precision of the FF-SAR measurements depends on the extent of multi-looking (incoherent averaging along-track) applied. Over Lake IJssel the precision varies from 4 to 11 cm, decreasing as multi-looking increases. The precision of FF-SAR with 100 m of multi-looking is equivalent to that of the standard delay/Doppler processing, which has an along-track resolution of about 300 m. The width and orientation of rivers and canals limits the maximum available multi-looking. After removing the 6 cm bias, FF-SAR heights of rivers and canals have an accuracy between 2 cm and several decimeters, primarily depending on the presence of other water bodies lying within the cross-track measurement footprint, as these contaminate the waveform. We demonstrate that FF-SAR processing is able to resolve and measure small ditches only a few meters in width. The visibility of these signals depends on the angle at which CryoSat-2 crosses the ditch and on whether or not the ditch remains straight within CryoSat-2’s field of view. In the best-case scenario, straight ditches at nearly 90° to the CryoSat-2 ground track, the ditch signal has high enough signal-to-noise to allow sub-decimeter accuracy of FF-SAR height measurement.