Optimal design of a water distribution network is formulated as a two-stage decompositon model. The master (outer) problem is nonsmooth and nonconvex, while the inner problem is linear. A semi-infinite linear dual problem is presented, and an equivalent finite linear problem is developed. The overall design problem is solved globally by a branch and bound algorithm, using nonsmooth optimization and duality theory. The algorithm stops with a solution and a global bound, such that the difference between this bound and the true global optimum is within a prescribed tolerance. The algorithm has been programmed and applied to a number of examples from the literature. The results demonstrate its superiority over previous methods. ¿ American Geophysical Union 1994