The City of Houston, Texas, has undertaken a major initiative to provide surface water service to the rapidly growing Harris County region. Suffering from severe groundwater subsidence, the region is subject to regulation by the Harris-Galveston Coastal Subsidence District (HGCSD), which mandates reduction of groundwater withdrawals. Serving as the regional water provider, the City of Houston will enable compliance with HGCSD regulations, address water supply and water quality challenges, and promote economic development in the region. The City is effecting this initiative through a collaborative strategic planning process involving stakeholders throughout Harris County, while proceeding with the development of major surface water system infrastructure components necessary to deliver regional service. The City of Houston has accomplished several major milestones toward the development of a regional solution to Harris County groundwater subsidence and water supply challenges. Since the inception of the City's regionalization initiative in late 1999, the City has: established a strategy for regional system development that will minimize system development costs and fully leverage opportunities for regional cooperation provided by HGCSD regulations; created the Houston Area Water Corporation to enable development of the Northeast Water Purification Plant (NEWPP) using a design/build/operate (DBO) procurement process; initiated a structured, defensible procurement process for development of the NEWPP through issuance of a comprehensive Project Definition Document to ensure highest value service; developed draft Memoranda of Understanding and Regional Water Supply Contract terms to enable local governments in north and west Harris County to be served by the City's regional surface water system; and, developed regional water rate concepts (and analysis framework) to distribute costs equitably across participants in the City-sponsored Groundwater Reduction Plan (GRP) required by HGCSD regulations. Includes table, figure.