During the 1980s and 1990s the Chileanwater and sanitation sector underwent deep reforms so thatprivate capital could finance the huge investments needed toachieve universal service. The regulatory framework put intoplace cleared the way for massive private equity. But usershave also paid the price of transforming the heavilysubsidized sector into a self-sustaining industry able toprovide universal coverage. This Note examines key featuresof the new regulatory scheme that have contributed to thesustainability of the reforms: a phased approach, anefficient pricing policy and methodology, and expert panelsto deal with conflict resolution.