Decentralized wastewater treatment systems (DEWATS) provide benefits for sanitation in rapidly urbanizing Kathmandu, Nepal, where centralized treatment is lacking. Existing DEWATS successfully treat wastewater from offices, hospitals, private houses, schools, and communities with locally available materials and low operation skills. Key design improvements include larger inlet chambers, channel inlets instead of pipes, and easier access for sludge removal. Proper construction, regular maintenance, and pre-determined management and funding are essential for long-term system performance and cost-effectiveness. DEWATS show potential as a sustainable sanitation option, but most cost-effective designs and media require further study.