The problem of designing an economically optimal water distribution system was formulated mathematically and it was shown that it can be solved by either linear programming or dynamic programming, provided the layout of the network is given. Computer programs were written which use these algorithms, and were tested on a few hypothetical networks. The problem of an optimal layout was approached through a heuristic man-machine interaction system whereby a designer can specify the layout on a cathode ray tube and the computer system will evaluate a least cost design. This system was tested on only a few cases, and difficulties in the hardware (terminal) prevented an extensive testing. At the moment, the computer programs must be considered as experimental, and further developmental work will be necessary to make them available to the general practicing engineers. (Author)