Twentieth-century water policies relied on the construction of massive infrastructure in the form of dams, aqueducts, pipelines, and complex centralized treatment plants to meet human demands. These facilities brought tremendous benefits to billions of people, but they also had serious and often unanticipated social, economical, and ecological costs. Many unsolved water problems remain, and past approaches no longer seem sufficient. A transition is under way to a “soft path” that complements centralized physical infrastructure with lower cost community-scale systems, decentralized and open decision-making, water markets and equitable pricing, application of efficient technology, and environmental protection.