Mozambique has made enormous strides in the water supply sector in the past two decades. The sector has separated water resources and water production roles from water supply asset holding and from water services management. It has also created a regulatory structure and body that has struck a balance between government and private-sector management while giving increasing voice to consumers. The reform process continues today, with expected modifications at decentralized levels of governance. After more than a decade emphasizing service expansion, service sustainability needs attention. The urban water delegated management framework's greatest challenge lies in maintaining operational cost recovery and making steady progress on capital cost recovery. The challenge for rural water supply lies not simply in expanding access, but in ensuring sustainable services. Progress in urban and rural sanitation has stagnated, and updated approaches to service delivery are urgently needed. Sector information management systems and human resource development have not kept pace with institutional expansion, resulting in a potential drag on long-term planning, financing, and implementation.