Achieving sustainable urban water management for developed cities is likely to require continuing and significant paradigm changes for planners. Demand management thinking has already largely replaced supply augmentation perspectives, and there are a growing number of new technologies for water recycling and other innovative approaches such as decentralisation geared toward minimizing water withdrawals and pollution. However successful implementation of new approaches to wastewater management is a multi-faceted challenge requiring input beyond merely technical. Controversy and community opposition has stalled some innovative projects. As a result, there has been some recognition not only of the need for functional, cost effective technology, and protection of the environment and public health, but also for social acceptability. This paper takes the social acceptance theme a little further, probing questions of institutional capacity and decision-making processes across water management organizations, as these are considered equally important to sustainable water outcomes as merely whether or not the public will accept a technology. This critical review of case studies of water management planning suggests that societal and institutional adaptation are critical issues for sustainable water management and highlights the need for significant change in the implementation of alternative water management strategies. Changing patterns of water use is a process of long-term institutional transformation. Based on this analysis, future policy directions should focus on facilitating stable predictable arrangements for making policy decisions in civic groups. This will involve long-term institutions for continuous negotiation among diverse stakeholders about meanings, values and relationships.