This report summarizes the currentcontext of the water and rural sanitation sub-sector and theanalysis thereof undertaken at the Cusco+10 seminar. Thefirst part of the report, basic rural services at the end ofthe 20th century, summarizes the situation as it stood inthe 1990s and the conclusions reached at the 1999 seminarworkshop. The second part, Trends in the first decade of the21st century, identifies some of the new variables that haveemerged and are shaping the context as work continues towardestablishing sustainable services. The third part,challenges for the next decade, reports the findings fromthe Cusco plus 10 analyses and sums them up in five majorchallenges to be addressed. Finally, the fourth part,conclusions, looks to the future and suggests some newtrends that are affecting the five major cross-cutting themes.