A water-cooled vertical engine is provided with an exhaust guide cooling water jacket and an exhaust manifold cooling water jacket formed in an engine compartment exhaust passage, a cylinder block cooling water jacket formed in a cylinder block, and a cylinder head cooling water jacket formed in a cylinder head. A first cooling path for supplying cooling water from a cooling water pump to the cylinder block cooling water jacket via the exhaust guide cooling water jacket and the exhaust manifold cooling water jacket is substantially independent from a second cooling path for supplying cooling water from the cooling water pump to the cylinder head cooling water jacket. Thermostats are provided in the cylinder block cooling water jacket and the cylinder head cooling water jacket, respectively.