Significant gaps and inequities in urban water and sanitation services persist, with a growing risk of exacerbation due to changes in the climate, global water cycle, and patterns of urbanisation. Urban water and sanitation systems need to transition to accelerate access to safe, equitable, and sustainable water and sanitation services, while enhancing resilience to respond to increasing risks. This paper reviews the persistent challenges in water and sanitation services, emerging risks from climate change, and imbalances in the global water cycle that threaten to impact urban water cycles, and potentially disrupt existing urban Water, Sanitation and Hygiene (WASH) systems. It identifies critical concerns in three areas: institutional arrangements (including informal service provisioning), technology and infrastructure, and financing (including operations and maintenance). The paper concludes by identifying critical elements required in these areas for successful transition of water and sanitation services and systems.