Urban water systems are an example of complex, dynamic human–environment coupled systems which exhibit emergent behaviors that transcend individual scientific disciplines. While previous siloed approaches to water services (i.e., water resources, drinking water, wastewater, and stormwater) have led to great improvements in public health protection, sustainable solutions for a growing global population facing increased resource constraints demand a paradigm shift based on holistic management to maximize the use and recovery of water, energy, nutrients, and materials. The objective of this review paper is to highlight the issues in traditional water systems including water demand and use, centralized configuration, sewer collection systems, characteristics of mixed wastewater, and to explore alternative solutions such as decentralized water systems, fit for purpose and water reuse, natural/green infrastructure, vacuum sewer collection systems, and nutrient/energy recovery. This review also emphasizes a system thinking approach for evaluating alternatives that should include sustainability indicators and metrics such as emergy to assess global system efficiency. An example paradigm shift design for urban water system is presented, not as the recommended solution for all environments, but to emphasize the framework of system-level analysis and the need to visualize water services as an organic whole. When water systems are designed to maximize the resources and optimum efficiency, they are more prevailing and sustainable than siloed management because a system is more than the sum of its parts.