Sustainability of development projects is considered essential for the continued delivery of services to beneficiary communities beyond external financing. However, various factors cause community projects to fail the sustainability test. This study investigated the determinants of sustainability for community-based water projects implemented through World Bank and Kenya Government financing known as Hazina ya Maendeleo ya Pwani. Research was conducted using sustainability criteria comprising social, organizational, technical and financial aspects that were selected based on literature review and community perceptions. The research was conducted in Kenya’s coastal region using data collected from 285 respondents. Frequencies, means and percentages were used to describe data while the Structural Equation Modeling technique determined factors influencing sustainability. Results illustrated that all the four indicators assessed predict sustainability. However, only the technical and financial indicators influence sustainability significantly. In conclusion, while it is important to incorporate all the four indicators during planning and designing of community-based water projects, special attention must focus on financial and technical aspects. The study recommends that building the capacity of Community Based Organizations in terms of technical competence and financial resources to support operation and maintenance is a requirement, rather than a choice, for sustainability of community-based water projects.