Urban water management is a critical component of sustainable development, integrating water supply, sanitation, stormwater control, and wastewater treatment to meet the needs of growing urban populations. This review examines the multifaceted challenges confronting urban water systems, particularly in developing regions such as Nigeria, with a focus on socio-economic, environmental, infrastructural, and governance policies. Rapid urbanization, population growth, and inadequate infrastructure have contributed a lot into these challenges. Additional pressures from climate change, weak governance, and financial constraints further undermine the resilience and efficiency of urban initiatives. The review highlighted inadequate treatment capacity, poor distribution networks and overdependence on informal water vendors prevail. Innovative solutions such as Integrated Water Resources Management (IWRM), Sustainable Urban Drainage Systems (SUDS), green infrastructure and smart water technologies are explored as pathways toward resilience and sustainability. Addressing urban water challenges requires a holistic governance framework integrating community participation, capacity building, policy reform, and financial innovation. Sustainable outcomes depend on combining technical solutions with institutional accountability, climate adaptation, social inclusion to ensure equitable and reliable water access for present and future urban generations.