The characterisation of rainwater in metropolitan Sydney and in rural New South Wales was undertaken. The results showed that factors such as the lack of vehicular traffic, air pollution and urban contamination meant that rural rainwater water quality was better. The rain water collected in both metropolitan and rural areas generally complied with the 2004 Australian Drinking Water Guidelines except for parameters such as the pH in both the metropolitan and rural rainwater tanks and the turbidity, and lead levels from the metropolitan tanks. This paper also reports the results of a laboratory and a pilot scale study with a deep bed filter (granular activated carbon, GAC) and microfiltration (MF) hollow fibre membrane filter system used to treat raw rainwater collected from a metropolitan rainwater tank. The results of the laboratory experiment and pilot scale systems focus on the non-compliant parameters of the sampling program, i.e. turbidity, lead and dissolved organic carbon (DOC). It was found that rainwater treated by the GAC filter removed the majority of the turbidity and organic substances. The treatment system reduced the concentration of turbidity, lead and DOC to below the Australian Drinking Water Guidelines limits. The pilot plant experiment demonstrated that a GAC filter system and gravity driven membrane could result in low cost and low maintenance operation.