Necessity of Sustainable water demand management (SWDM) is immensely higher in the rapidly urbanized mega cities of the world where groundwater depletion and water deficit are taking place perilously. This paper focuses on the present condition of water demand, supply, system loss, pricing strategy, groundwater level, and per capita water consumption of Dhaka city, Bangladesh. The study founds population growth has a large influence on water demand to rise and demand of water is not responsive to the existing pricing rule adopted by DWASA. It emerges that, water demand is increasing at 4% rate an average in the Dhaka city since 1990 and groundwater table goes more than 70 m down in central capital due to extensive withdrawal of water. The study suggests an integrated SWDM approach, which incorporates optimum pricing, ground and surface water regulation, water conservation, sustainable water consumption and less water foot print to ease groundwater depletion. In order to attain sustainability in water demand management (WDM) the study recommends certain criteria under economic, social and environmental segment to administer the increasing water demand of growing population and conserve the fresh water resources of the world’s mega cities for social–ecological resilience building.