Water supply is an essential service to buildings along with other services such as electricity supply and telephone. Many of the new cities in developing countries do not have 24-hour safe drinking water in their buildings, and water supply is often intermittent and is of poor quality. In contrast, developed countries use a much higher volume of potable water in their buildings, which can be reduced significantly. In urban areas, sustainability and water efficiency of buildings are of great significance as many water authorities have been struggling to meet the increasing water demand due to higher populations. The climate change is bringing more extremity in the climate systems such as long and frequent droughts and higher temperature episodes, which increase water demand significantly when water availability is the lowest. This chapter presents water recycling and reuse in buildings with a special focus on rainwater harvesting systems in Australia to reduce potable water demand within buildings. It has been found that rainwater harvesting is one of the most popular means of alternative water supplies in buildings; however, there are further scopes of development in the rainwater harvesting systems by bringing innovations into these systems to make future buildings more water-efficient.