The purpose of this paper is to assess prevailed water and sanitation issues in peri-urban areas of Punjab, Pakistan. The suitable ways to develop sustainable sanitation system in relation with governance support need to be found for such zones. The analysis of empirical research suggested few important results as follow: global water and sanitation issues in peri-urban zones correlated with area specific issues; public awareness and guidelines for operation of technical systems suggested as solution in designed model was a major challenge. Inhabitants were aware of re-use of human wastes in agriculture because of old tradition in Pakistan. The usage and handling of dry toilet system was also another challenge. Corruption in society at each level from local area to government found to be the major hurdle for successful implementation of any project.