Climate change, driven by increased rainfall variability and rising temperatures, exacerbates water scarcity and significantly affects household water, sanitation, and hygiene practices. In response, households often adopt coping mechanisms that, while intended to conserve water, may result in reduced hygiene and sanitation practices, thereby increasing exposure to health risks. In the Bahi Swamp sub-basin of Tanzania, acute water scarcity prevails due to semi-arid climate conditions, climate change, and inadequate water management, posing significant threats to local livelihoods. To assess household water scarcity, coping strategies, challenges, and measures for sustainable water management, a semi-structured questionnaire was administered to 260 households. The results indicate that most households experience persistent water shortages, causing conflicts over water use. Most households (92%) adopted coping strategies such as purchasing water, storing water, reducing daily consumption, rainwater harvesting, and switching water sources; however, some of these strategies may increase the risk of water-borne diseases and negatively affect overall wellbeing. Rainwater harvesting could serve as an effective strategy for addressing domestic water scarcity. Lack of knowledge and training, and financial constraints are key challenges to sustainable water resource management. Crucial measures include improved access to training and resources, along with financial support or subsidies.