This document is intended to serve as an instrument for governments to establish a sector assessment process in their respective countries, and to generate national performance assessments of the water supply and sanitation sector recurrently. It provides orientation on how to build up a sustainable process, rather than being merely a tool to prepare sector assessment reports. This guide covers the most relevant aspects of drinking water supply and sanitation services, including health, institutional, financial, management, legal, technical and social issues. Although it is primarily focused on drinking water, sanitation and hygiene, it also provides guidance on how to generate relevant insights into water resources and environmental issues.Drinking-water and sanitation sector reports prepared through this guide will provide invaluable information and sound analysis, which are crucial for decision- and policy-making, as well as programe formulation and implementation. Such reports are also sound instruments to facilitate the dialogue between government, the private sector and multilateral and bilateral agencies.The first part of this guide is focused on basic issues and suggestions for the establishment of a sector assessment process at the country level. Annex I provides specific guidance for the preparation of a sector assessment report. An electronic file (Excel file with extension: Data_Collection.xls) with a structured questionnaire is provided to facilitate the collection of information for the preparation of the sector assessment report.