Almost all water use in Chicago comes from Lake Michigan, but little of the nearly 2 billion gallons of Lake Michigan water used daily is returned to the lake. Instead, it flows out of the Great Lakes basin, to the Mississippi River. Even after a 1967 Supreme Court Decree limited the diversion to 2100 MGD, the Chicago diversion is still questioned. To meet the future public water demand in this region and obey the Decree and navigation rule in Chicago Sanitary and Ship Canal, a variety of alternatives has been analyzed, such as applying water reuse, importing water from neighbor counties, resetting the water rate, and increasing groundwater withdrawal. In this paper we examine one of the most promising alternatives, treated wastewater reuse. Seven wastewater treatment plants (WWTPs) of the Metropolitan Water Reclamation District of Greater Chicago (MWRDGC) have 1400 million gallons of treated effluent production. The majority of the effluent (98 %) is flushed down to rivers and canals without reuse. The high quality of treated wastewater makes it an excellent source for different kinds of reuse application, ranging from industrial processes that need high water quality to land irrigation applications that can get by with lower water quality. The purpose of this project was to explore the potential for reusing municipal wastewater in the Chicago metropolitan area. We selected 475 industrial users, 614 parks, 108 golf courses, and 313 property owners along Chicago River and the Sanitary & Ship Canal for prescreening purposes. A Geographic Information System was used to explore the distances between potential treated wastewater users with the seven WWTPs. To explore incentives and barriers to treated wastewater reuse we considered the following four issues: Regulation and policy, health risk, technology, and economics. Results show water use in Chicago is inefficient and there are many opportunities for treated wastewater reuse. This project explores the different interests of different entities who are related to water use practices. From perspectives of those different entities, such as Metropolitan Water Reclamation District of Greater Chicago (MWRDGC), the City of Chicago, industries, residents and Non-governmental organizations (NGOs), under the economic, regulatory, and technical constraints, to build a decision support system for maximizing the welfare for the whole local society. This multi-objective decision model is able to identify water reuse opportunities, prioritize these water reuse opportunities by cost factor, and optimize the allocation of urban water resources. This model include opinions from most concerned stakeholders, thus can provide essential information to decision makers in planning and managing urban water resources to a sustainable approach.