This study examines the critical issue of water scarcity in the Dharan Sub-metropolitan city, analyzing the various factors that are driving factors driving water demand and proposing strategies and ensuring water security. This study finds that factors replace with the rapid expansion of residential areas, increasing population, steeper slopes, changing lifestyles, natural hazards, technical and management leakage are major contributors to the growing water shortages in the area, leading to a situation of water instability. However, the study also identifies that factor such as precipitation, geology, soil types, potential water sources in the area offer opportunities for stabilizing the water supply in Dharan Sub-metropolitan. This study highlights the combined effect of these various active factors that led to an increase in per capita demand of water from 71 to 100 lpcd. This increasing water demand and shrinking of surface water led to Interrupted Water pumping and overexploitation. Additionally, the study indicates that due to high level of Non-Revenue Water (NRW) up-to 40%, certain parts of the city’s residents are facing major difficulties in accessing clean drinking water. The study also finds that positive changes in precipitation, supportive soil types and geology in the city of Dharan increases the potential for water recharge and harvesting. In order to achieve a sustainable and climate-resilient water supply, the study recommends implementing Water management tools likewise protective measures for critical water zones, stabilizing stream banks and gullies for surface water source improvement, artificial recharge of the city through Climate Adaptive Recharge Pits (CARP) and slope interception methods, as well as community-based water harvesting for groundwater source improvement. Furthermore, the study suggests establishing R&D unit involving national and local level experts and stakeholders for better planning and management.