The article discusses how water and sanitation services in small towns in Honduras have shifted from centralized to decentralized management. This change aims to improve service quality by giving decision-making power to local authorities. The 2003 Water and Sanitation Framework Law delegates service provision authority to municipalities. However, as of mid-2016, some towns still face challenges in transferring these services due to concerns about salaries and local capacities. The government aims to establish effective institutional models in small towns early on to prevent issues seen in larger cities. The study focuses on informing development financing, government policy, strengthening capacity of service providers, and sharing knowledge about water and sanitation services in small towns.