An urban water system (UWS) has three main service components: 1) drinking water, 2) wastewater, and 3) stormwater. Historically, each component in urban water development evolved over time with different objectives for “different” types of water. Even today, the trend continues, as different urban water services are managed in silos. This trend is less sustainable, resilient, and reliable mainly because of significant pressures on freshwater supplies exerted by increasing population, demand for high living standards, rapid urbanization, and climate change. To cope with these challenges, the conventional thinking necessitates a change. This paper identifies a number of significant research gaps related to inter-relationships among various UWS service components. An innovative paradigm - One Water Approach (OWA), which considers “urban water” as a single entity, is investigated. Currently, Australia, the United States, and Singapore are leading the pack to implement OWA, whereas only a few Canadian municipalities have embraced OWA at a very basic level. In the European Union nations, Amsterdam (Netherlands) emphasized the need for integrated water resource management in an urban environment. This review highlights the challenges in adopting OWA and also proposes guiding principles in ongoing water management practices. Institutional complexities involving an intricate regulatory structure for different UWS service components, a wider fragmentation in decision making at government levels, and insufficient stakeholder engagement within and between water utilities and other institutions present serious challenges. Various strategies such as, data sharing between water utilities, use of novel technologies (e.g., artificial intelligence, sensor technologies), and visionary leadership at different government levels have been identified as key drivers for the adoption and implementation of OWA. The authors believe that a paradigm shift from ‘conventional’ approach to OWA is needed to increase resiliency and reliability of water services and assist decision-makers of UWSs.