Providing safe and affordable water to the rapidly expanding urban population of the developing world is fundamental in promoting decent living conditions, improved health and economic outcomes, and working towards the Millennium Development Goals (MDGs). Given the challenges involved, successful provision will require new and innovative models. The case studies presented here demonstrate that private firms can generate successful models by harnessing the dynamism of both the private sector and low-income urban communities. ~ ~Two case studies of private sector involvement in water provision are presented: The Manila Water Company’s Water for Poor Communities (TPSB) Programme and the Water & Sanitation for the Urban Poor (WSUP) Partnership. The two models share common elements of innovation: a multi-sector approach to service expansion and provision, including partnerships with local authorities; strong community involvement in option selection, design and operation; appropriate service levels to reduce costs; flexibility in the type of service provided. This paper proposes that these models could be replicated in other cities, whilst acknowledging that their success will depend upon strong regulatory frameworks, a cooperative government, and target populations that have sufficient income levels for business initiatives to be commercially viable.