In urban centres of industrializing countries, the majority of houses are served by on-site sanitation systems such as septic tanks and unsewered toilets. The faecal sludges (FS) collected from these systems are usually discharged untreated into the urban and peri-urban environment, posing great risks to water resources and to public health. Contrary to wastewater management, the development of strategies to cope with faecal sludges, adapted to the conditions prevailing in developing countries, have long been neglected. The authors describe the current situation in FS management and discuss important issues regarding FS management. Further, treatment options are presented which may prove sustainable in industrializing countries. The objective is to make planners and decision-makers aware of the challenges posed by faecal sludges and of the need to include FS management in strategic planning for urban sanitation improvements.