Municipal water supplies in most prior appropriations states of the United States have long been accorded special protection under water law. Key among these protections have been provisions allowing municipalities to appropriate excess water for anticipated future needs without requiring that the unneeded water be used in the interim. Some states, Colorado for example, even allow municipalities to divert water they do not need and sell it to others until they need it. In addition to allowing appropriations of excess water, some states allow for reservations of water for future needs without actual appropriation being required. These fundamentals of municipal water supply are threatened as competition for scarce water supplies increases and as interest groups and new government regulations increase demands for long-range planning. Increasingly, attempts are being made to hold municipal suppliers to many of the same standards as non-municipal suppliers. This paper discusses the five major new planning and engineering problems: (scrutiny of excess appropriations, conservation, wastewater reuse, Safe Drinking Water Act Amendments, peak demand) facing municipal suppliers in many western states. While the paper focuses primarily on the issues facing appropriations states, the author believes that other states and Canadian provinces face many of the same issues.