Rapid urbanization is intensifying pressure on local water resources, leading to growing water stress in cities worldwide. This research examines how the expansion of urban populations, often in unplanned and under-serviced settlements, impacts water availability, quality, and distribution. Key challenges include over-extraction of groundwater, pollution from inadequate wastewater treatment, infrastructure deficits, and exacerbation of water scarcity by climate change. The study reviews current literature and data, incorporating international and Indian case studies—from “Day Zero” in Cape Town to the 2019 Chennai water crisis—to illustrate the socio-economic and public health vulnerabilities arising from urban water stress. An integrated assessment of sustainable management strategies is presented, emphasizing approaches such as Integrated Urban Water Management (IUWM), decentralized wastewater treatment, water conservation technologies, rainwater harvesting, and community participation. These strategies are discussed in the context of governance frameworks and technological interventions needed to ensure equitable and resilient urban water supply. The findings underscore that without holistic and inclusive water management, rapid urban growth will continue to threaten water security and public health. Conversely, with proactive planning and sustainable strategies, cities can mitigate water stress and build resilience against future challenges. The paper concludes with recommendations for policy and practice, highlighting the critical role of integrated governance and community engagement in securing urban water futures.