This World Bank Technical Paper presents a discussion on participatory development at all stages of the development process, with a specific emphasis on participatory evaluation. Involving stakeholders closely in all aspects of the program is argued to foster ôownershipö, accountability, and a willingness on the part of users to manage and invest in services. A mechanism is needed to allow for learning, correction, and adjustment to be built into this participatory development process. To do this, a clear set of objectives and indicators of success which promote accountability and participation and which can be monitored and evaluated. This document is geared to provide policymakers, managers, and planning and evaluation staff with ideas about participatory processes and indicators that may be used to involve community members and others in program evaluation. The focus is on the development of key indicators that can be measured to determine progress of water and sanitation programs, their sustainability, effective use, and replicability. Short summaries (ôfield insightsö) of projects are included throughout to complement the discussions.