The city dug wells and large cisterns at Main intersections to provide water for fire fighting. By 1886 the demand for a more dependable supply was met with 100 hydrants installed by the new Ann Arbor water company. From a station Northwest of town, water was pumped from the nearby Huron river up to the Sunset road reservoir. Pipes carried water from there down into town. In 1914 the city purchased the company.

The service of the privately owned Ann Arbor Water Company continued to be a source of tension. The company offered to sell its holdings to the city for $450,000, but council and Mayor Royal S. Copeland felt the price was too high. Council then passed legislation requiring the company to lower its rates to levels comparable to those in other cities of Ann Arbor's size. Denying the city had the right to regulate rates, the franchise nonetheless "voluntarily" lowered them in 1902. The city, however, claimed to have established the principle of regulation.