Depletion of water supplies for potable and irrigation use is a major problem in the rural wadi valleys of Saudi Arabia and other areas of the Middle East and North Africa. An economic analysis of supplying these villages with either desalinated seawater or treated wastewater conveyed via a managed aquifer recharge (MAR) system was conducted. In many cases, there are no local sources of water supply of any quality in the wadi valleys. The cost per cubic meter for supplying desalinated water is $2-5/m(3) plus conveyance cost, and treated wastewater via an MAR system is $0-0.50/m(3) plus conveyance cost. The wastewater reuse, indirect for potable use and direct use for irrigation, can have a zero treatment cost because it is discharged to waste in many locations. In fact, the economic loss caused by the wastewater discharge to the marine environment can be greater than the overall amortized cost to construct an MAR system, including conveyance pipelines and the operational costs of reuse in the rural environment. The MAR and associated reuse system can solve the rural water supply problem in the wadi valleys and reduce the economic losses caused by marine pollution, particularly coral reef destruction.