Water demands in the Aegean Islands have increased steadily over the last decade as a result of a building boom for new homes, hotels, and resorts. The increase in water demand has resulted in the disruption of past sustainable water management practices. At present, most freshwater needs are met through the use of the limited groundwater, desalinated seawater, and freshwater importation. Wastewater reclamation, not used extensively, can serve as an alternative source of water, for a variety of applications now served with desalinated and imported water. Three alternative processes: desalination, importation, and water reclamation are compared with respect to cost, energy requirements and long-term sustainability. Based on the comparisons made, water reclamation and reuse should be components of any long-term water resources management strategy.