This chapter analyses three themes in the evolution of urban water sector governance and regulation in developed countries over the last few decades. The first theme is a reduction in direct government management and control of the urban water systems through a process we describe as devolution. The second theme is the growing sophistication and use of policy tools for regulating the urban water sector, in part as a result of the devolution and separation of ownership, operation, and regulation. The third theme is the re-emergence of broader social and environmental concerns in the water sector, prompting a variety of government responses. The themes are necessarily high level, one reason being that, historically, they have appeared in a variety of forms and under a diversity of governance, regulatory, and environmental circumstances. We draw on evidence from across the developed world and use case studies from Australia and France to illustrate how the themes have manifested.