Arizona's Groundwater Management Act limits the use of groundwater to meet growing demand for water by the municipal sector. The state's recharge and recovery program allows for water reuse through aquifer recharge and later recovery inside or out of the area of hydrologic impact. The paper discusses water reuse within the municipal sector in Arizona, with a special focus on the Tucson metropolitan area. Increased effluent utilization is playing a more prominent role in long-range planning efforts. The paper focuses on the role of reclaimed water in water management planning. It explains how the use of effluent is influenced by water quality considerations and institutional/legal arrangements.