The buildup of the water sector in developing countries requires infrastructural support, institutional development as well as capacity building and knowledge enhancement. This thesis focuses on the latter issues, analysing the Mozambican rural water sector. Proposals for a capacity building and research program are presented for the province of Sofala. The approach for the definition of the needs was based on a comparison between the normative and the expressed needs. Normative needs resulted from the analysis of official documents. Expressed needs were gained through interviews and focus group discussions with various stakeholders of the rural water sector. The interviews were also used to identify the potential for capacity building and research focusing on institutions situated in Sofala province. The expressed and the normative needs show a good concordance. Problems of the rural water sector are related to the deficits in human capacity. Inadequate operation and maintenance of water and sanitation infrastructure, missing management, PR and planning skills, absent environmental and hygienic awareness affect negatively the water sector from the national down to the province, district, and community level. The primary needs are vocational training for district technicians, community agents, public administration, private enterprises, and the water committees. The water users/communities must be included in the capacity building process, educating them particularly in hygiene and sanitation issues. Applied research must be targeted to the practical problems of the rural water sector. Capacity building has to switch from single training actions to a capacity building program approach. The program has to be continuous and demand driven. The four program proposals show how a donor can intervene initiating the capacity building and applied research process in the rural water sector of Sofala.