This study attempts to understand the relationship between water and livelihoods in poor communities, and Demand Resposive Approaches (DRA) in rural water supply and sanitation projects. It is in part methodological, piloting the household economy approach (HEA) as a practical and an affordable tool for analysing rural livelihoods in relation to DRA in rural water supply projects. The study has adopted a case study approach, based on wealth groups as a way of analysing the impact of DRA on rural livelihoods.