The research study was conducted from June 2017 in Kapchorwa Main hospital covering the local community, civil servants and local leaders such as the councilors. The study was intended to sample forty respondents, but a number of them turned up for interview while District health officials also turned up to participate. The research was aimed at finding out how decentralization has impacted on the water, establishing the challenges faced in decentralized provision of water services and suggested possible mitigation measures for such challenges. It was found out that the major impact of decentralization on the water sector was the promotion of people’s participation in the affairs water services within their localities which has promoted easy mobilization of resources from people and sustainability of water projects. The major challenges faced in decentralized provision of health services were found to be corrupted within the sector, limited funding and inadequate qualified personnel at local levels. Other challenges are limited community participation in terms resource mobilization and maintenance of water projects and poverty which limits the ability of people afford better health services