The top priorities for urban water sustainability include the provision of safe drinking water, wastewater handling for public health, and protection against flooding. However, rapidly aging infrastructure, population growth, and increasing urbanization call into question current urban water management strategies, especially in the fast-growing urban areas in Asia and Africa. We review innovative approaches in urban water management with the potential to provide locally adapted, resource-efficient alternative solutions. Promising examples include new concepts for stormwater drainage, increased water productivity, distributed or on-site treatment of wastewater, source separation of human waste, and institutional and organizational reforms. We conclude that there is an urgent need for major transdisciplinary efforts in research, policy, and practice to develop alternatives with implications for cities and aquatic ecosystems alike.