This thesis is an exploratory study of the role that Communication for Social Change principles play in World University Service of Canada's (WUSC) project to strengthen the capacity of Peruvian municipalities in the area of water and sanitation. The research took place in two case study locations, one urban and one rural, and was conducted through stakeholder workshops, semi-structured interviews, participant observation and a review of project documents. The findings describe the communication, collaboration and perceived changes in individual and organizational capacity that have taken place based on WUSC's work with municipal governments, water companies, water user groups, and end users. In doing so, the research reveals that WUSC carries out many effective communication and capacity development activities based on their long-term engagement with their counterparts and their "learning by doing" approach. However, they do not have overall strategies in either of these areas, which has resulted in the exclusion of some stakeholders and difficulty in monitoring and evaluating these areas which may hamper the overall long-term impact of the project. Based on these findings, the paper suggests how Communication for Social Change principles could be applied to help improve other capacity development projects of this type. While this study does not directly address debates about water privatization, it does offer reflections for improving the effectiveness of local level water management.