Urban water utilities often fail to provide adequate water supply services to low-income urban communities for various reasons: a poor infrastructure, a difficult topography, utility perceptions that low income communities are financially unreliable and transient, and/ or lack of the will. As a result, up to 31% and 57% of the urban population in Africa, and Asia, respectively are not served by piped water supply (WHO/UNICEF, 2000). In order to improve service provision to the urban poor drastically, there must be institutional and technological innovations. Institutional innovations can occur at three levels: within the community; at the interface between the community and the utility; and in the national government policies and strategies. This is a case study on provision of water services to low-income communities of Durban, South Africa where a combination of technological innovation and incentives from the central government have greatly improved service coverage to the urban poor.