This paper offers a methodology for structuring the design space for innovative process engineering technology development. The methodology is exemplified in the evaluation of a wide variety of treatment technologies for source-separated domestic wastewater within the scope of the Reinvent the Toilet Challenge. It offers a methodology for narrowing down the decision-making field based on a strict interpretation of treatment objectives for undiluted urine and dry feces and macroenvironmental factors (STEEPLED analysis) which influence decision criteria. Such an evaluation identifies promising paths for technology development such as focusing on space-saving processes or the need for more innovation in low-cost, energy-efficient urine treatment methods. Critical macroenvironmental factors, such as housing density, transportation infrastructure, and climate conditions were found to affect technology decisions regarding reactor volume, weight of outputs, energy consumption, atmospheric emissions, investment cost, and net revenue. The analysis also identified a number of qualitative factors that should be carefully weighed when pursuing technology development; such as availability of O&M resources, health and safety goals, and other ethical issues. Use of this methodology allows for coevolution of innovative technology within context constraints; however, for full-scale technology choices in the field, only very mature technologies can be evaluated.