This chapter evaluates the choice behaviour of users of different modes of water supply in Yogyakarta (Indonesia). We set out to understand the link between characteristics and performance of different water sources and consumer behaviour, and to estimate the potential influence of policy measures on water provision choice. For the study, three urban villages belonging to the district of Telgarejo were selected: they were considered to have enough variation in socio-demographic characteristics and types of water provision to allow variations in preferences to be captured. Specifically, a stated choice experiment was conducted to understand water provision choice between piped water and well water (groundwater). Results suggest that water quality and continuity of supply are more important for respondents than price. The choice model shows that the likelihood of people switching to piped water is high if water quality and continuity are brought to a higher level. Although the municipal water supply is currently operating at a loss and has problems generating sufficient revenue, the results indicate that the vicious circle of reducing levels of service and declining income can be broken if the municipal water utility is able to improve water quality and continuity of supply.