Water-use efficiency in Taiwan is low because geo-morphologically Taiwan is a mountainous island, with dense population clustered along the narrow habitable perimeter of the island, and inadequate topographic features for storing sufficient water volumes. When the demand for water-resources increases as societies become more modernized, many countries including Taiwan are faced with the problems of limited water resources. In order to optimize water resources management, it is necessary to inventory the demand and supply of various water-use categories in all areas on the island and be able to predict their trends in the future. Domestic water is therefore the focus of this research project. Trend in the past, factors and mechanisms controlling domestic water use have been analyzed; and an artificial neural network (ANN) model has been developed to estimate the water demand needed for domestic water use. It is demonstrated that the ANN model has been successfully adopted to simulate the demand and supply trend in domestic water use. Therefore, the results from this study can be used as an important reference for the planning and management of water resources of Taiwan.