This article discusses the evolution of community-managed projects (CMPs) along with the global community-based management of water supply and sanitation services since the 1960s, particularly the evolution of Ethiopian water resources development in the last century. The study was conducted with intensive reviews of journals, reports, project documents, and discussions with the people involved in CMP implementation, including many Ethiopian government officials. The article presents the various development phases of the water and sanitation sector in Ethiopia together with national and global influences. Currently, in the 2010s, the CMP financing mechanisms and the national development of water supply and sanitation are more organized and integrated, and are in the stage of scaling up. The recently agreed national water, sanitation, and hygiene strategic framework is expected to have significant impacts on the rural water supply and sanitation development in Ethiopia.