Third pipe systems for recycled water are on the periphery of options for more resilient urban water management in the face of water scarcity. A number of schemes in the Australian water industry provide useful learnings. Even though direct supply costs are often higher than the potable water price, there are distinct circumstances where such schemes can be justified economically. Even where schemes have not been economic, there can be valuable lessons around the institutional alignment required to enable innovation for integrated urban water management.