This manual is the second volume in a series of publications on community development programs. Guidelines are suggested for small-scale water projects that would benefit segments of the world's urban or rural poor. Strategies in project planning, implementation and evaluation are presented that emphasize environmental conservation and promote sustainable development. Topics addressed include: (1) water users and uses (with data on water distribution and access); (2) water and environment (identifying ecological concepts related to water resource development); (3) water and health (discussing common water-related diseases and prevention and control efforts); (4) enhancement, development and protection (highlighting plans for system improvement, enlargement, and new source development); (5) sanitation and waste treatment (illustrating basic waste disposal methods); (6) water and agriculture (emphasizing water-agricultural relationships including transport factors and irrigation methods); (7) aquatic products (specifying guidelines for natural product projects); (8) water and energy (stating the potentials and problems of small scale projects); and (9) planning (presenting guidelines, a model, and assessment criteria). Appendices contain a five-page annotated bibliography and addresses of references and publications. (ML)