Deterioration of the water distribution network due to aging and stress causes increased operation and maintenance costs, water losses, reduction in the quality of service, and reduction in the quality of water supplied. Since the most expensive component of a water supply system is the distribution network these increased costs can be substantial. In Kleiner et al. an approach is proposed in which the water distribution network economics and hydraulic capacity are analyzed simultaneously over a predefined analysis period while explicitly considering the deterioration over time of both the structural integrity and the hydraulic capacity of every pipe in the system. In this paper a methodology is presented to implement this approach into a decision support system that facilitates the identification of an optimal rehabilitation strategy. The proposed methodology uses dynamic programming combined with partial and (sometimes) implicit enumeration schemes to select, for each pipe in an existing network, the rehabilitation alternative and the time of its implementation so as to minimize the cost of the rehabilitation investment and all maintenance costs over a predefined time horizon and subject to certain constraints. The methodology is validated (1) by comparing some results to those obtained from a restricted exhaustive enumeration and (2) by devising a survey in which utility managers were required to find an optimal rehabilitation strategy for a hypothetical distribution system and then comparing the managers' strategies with the one obtained from the proposed methodology. ¿ 1998 American Geophysical Union