Water and energy are critical resources that are essential and interdependent. Satisfying consumers' water needs requires energy for supply, purification, distribution, and treatment of water and wastewater. This energy consumption to provide water is linked with negative environmental externalities. This paper provides an overview of the energy and environmental costs related to water supply services in Mexico City, one of the largest cities in the world; this city is heading towards a major water crisis, more than 30% of its water supply comes from external sources. The internal groundwater sources are overexploited between 9 and 12 m3/s generating 6–28 cm of sinking every year. The current water availability is 130 lt/person/day, which is below the minimum requirements. Also, half of Mexico City's water supply is lost through poor infrastructure alone and mismanagement of water resources. The external and internal sources of water supply are analyzed in terms of the energy consumption and costs as well as the generation of contaminants in the atmosphere such as CO2, SO2, N2O. Finally, some opportunity areas are provided to reduce energy use and contamination of the non-sustainable water consumption pattern of Mexico City.