Country-wide urbanization in Uganda has continued amidst institutional challenges. Previous water and sanitation interventions have not addressed underlying issues of poorly managed urbanization, which is linked to low productivity, urban poverty, unemployment, limited capacity to plan and offer basic services. This ethnographic study was carried out in three urban centres of Gulu, Mbarara and Kampala to explored relationships between urban livelihoods and sustainable urban sanitation. Kampala especially, was plagued with poor sanitation services and a mismatch between demand and available capacity for service provision. Most urbanites were trapped in poverty, whereby economic survival trumped the need for meeting desirable sanitation standards. Sustainable urban livelihoods are critical in reducing slums, improving slum living and curtailing the onset of slumification. Urban authorities need to make urban centres economically vibrant as an integral strategy for attaining better sanitation standards.