This paper examines urban water use, wastewater flows, and storm water flows in the context of Australia＇s water resources. The costs of water conservation and recycling are also examined together with some of the constraints. The potential for water recycling in Australia and the implications of future water conservation and recycling scenarios on Australia＇s water resources and the environment are discussed. The development of new treatment systems will reduce quality constraints and open up new avenues for recycling. These may include large-scale potable reuse as well as decentralized treatment and local recycling options for both effluent and storm water. The implications of these alternatives for water recycling and the use of Australia＇s water resources are discussed.