Bolivia's drinking water and sanitation coverage has greatly improved since 1990 due to a considerable increase in sectoral investment. However, the country continues to suffer from what happens to be the continent's lowest coverage levels and from low quality of services. Political and institutional instability have contributed to the weakening of the sector's institutions at the national and local levels. Two concessions to foreign private companies in two of the three largest cities—Cochabamba and La Paz/El Alto—were prematurely ended in 2000 and 2006 respectively. The country's second largest city, Santa Cruz de la Sierra, relatively successfully manages its own water and sanitation system by way of cooperatives. The government of Evo Morales intends to strengthen citizen participation within the sector. Increasing coverage requires a substantial increase of investment financing.

Water supply is the provision of water by public utilities, commercial organisations, community endeavors or by individuals, usually via a system of pumps and pipes. Public water supply systems are crucial to properly functioning societies. These systems are what supply drinking water to populations around the globe. Aspects of service quality include continuity of supply, water quality and water pressure. The institutional responsibility for water supply is arranged differently in different countries and regions. It usually includes issues surrounding policy and regulation, service provision and standardization.