Water security is becoming a global issue of concern. In developed nations like Australia, high population growth and strong economic development are increasing demand, while supply is under threat from environmental degradation and climate change. Centralised reservoir and distribution networks have long served major metropolitan centres with potable water supply. However, the capture capacity of traditional supply sources is approaching a limit in many areas, leading to a host of new supply options coming into consideration (WWAP, 2012). Correspondingly, water security is considered as one of the six key risks in Australia under a changing climate. The Intergovernmental Panel on Climate Change asserts that climate change will lead to a reduction in water supply for irrigation, cities, industry and riverine environments in those areas where stream flow is expected to decline (for example in the Murray-Darling Basin, Australia) and annual mean flow may drop 10 to 25% by 2050 and 16 to 48% by 2100 (Hennessy et al. 2007). Rainwater tank systems, collecting and distributing water at a decentralised level, are one potential solution to assist in bridging supply-demand gaps. The basic principle of these decentralised systems is the capture of precipitation collected from the available roof area, which flows by gravity into a storage tank, where it can serve demand for water end-uses. Historically, internally plumbed rainwater tanks (IPRWTs), serving water end-uses inside the house, have only been prevalent in rural areas in the absence of centralised supply infrastructure. In the last 10 to 20 years, amid new concerns over water security, a variety of water businesses, governments and other stakeholders have been advocating the use of IPRWTs in urban areas. However, almost universally these systems have been recommended and implemented without a proper understanding of their underlying viability and performance. In an urban setting, there are a multitude of alternative water supply options and any chosen supply system must be both competitive and sustainable. This chapter details an investigation into the economics and performance of IPRWTs conducted in Australia’s South-east Queensland (SEQ) region and examines these findings in an international context. The study utilises a combination of modelling and empirical data to generate a range of unit life cycle costs (LCC) under different scenarios and conducts a sensitivity analysis on pertinent variables.