Midterm evaluation of a project to strengthen the capability of Ecuador's Institute of Sanitary Works (IEOS) to assist rural communities in eight provinces (Carchi, Imbabura, Pichincha, Cotopaxi, Chimborazo, Tungurahua, Azuay, and El Oro) to: (1) install cost-effective, safe water supply systems and latrines; (2) use the water and latrines to improve family health status; and (3) maintain and improve the systems in the future. The evaluation included reviews of project files, reports, technical documents, advisory reports, and project studies; interviews with key personnel of the Ministries of Urban Development and Housing and of Public Health, IEOS, USAID, World Bank, the United Nations Development Program, and the Inter-American Bank; and visits to 11 rural communities. Major findings and conclusions are as follows. (1) The training and TA for management development was adequately devised by WASH, and stimulated the establishment of a management style that abided by the lines of authority but which, in turn, was implemented through teams and on the basis of agreements on objectives and identification of solutions to organizational and functional problems. (2) The project planning and monitoring system was not sufficiently decentralized. (3) The goals established for training could not be attained because the number of organizational and community training slots is too ambitious. The project did not provide the time needed to train the central group, funds did not come in on time, and the component started several months behind schedule. (4) The planning process for the health education component is carried out primarily on the central level. The provincial level only develops programming for weekly activities. There is no supervision of promoters at the provincial level due to the lack of IEOS funds to finance this effort. (5) The quality of the TA has been very good. It is recommended that: (1) during the time left to carry out the project, the health training and operating and maintenance components be upgraded, and the diagnosis and inventory of Rural Potable Water and Sanitation System Construction (RPWSSC) systems be finished; (2) for the institutional training component, the project continue only with those activities that are geared toward personnel who will possibly remain with the new IEOS, since there will be a personnel cutback; (3) given the conditions of uncertainty in which IEOS exists, USAID request Government of Ecuador (GOE) officials to develop a more precise legal status; (4) once the future of IEOS has been defined, consideration be given to the development of a new project that would strengthen the provincial level and test new action alternatives for the RPWSSC program, such as of the private sector, nongovernmental organizations, provincial councils, and municipalities. It is also recommended that the coastal area be covered more extensively. Lessons learned include the following. (1) Various rural communities have been able to operate and maintain sophisticated water supply systems with treatment plants, including aeration, sedimentation, filtration, and chlorination components. This is a very positive result and it is partly due to the fact that those communities were able to pay a full-time trained operator. (2) The communities in the coastal region of Ecuador resist the idea of contributing their own work to the construction of the RPWSSC systems, but they are prepared to cover operating and maintenance costs by means of timely payment of fees. (3) Hygienic water supply systems involving priming are very popular and accepted in Ecuador, provided the water system delivers adequate volume. (Author abstract)