The recent rapid development of underground utility tunnels (UUT) in China reflects the government's resolve to improve the municipal service amid rapid urbanization. Although safety is of primary concern in the design and operation of the UUT, the moisture issue appears to be neglected. In the southern and eastern China, however, condensation in the UUT is noted and is believed to be responsible for the high rate of equipment failure and the deterioration of air quality inside the tunnel. To understand the moisture issue and its implications to the design and construction of the UUT, this study investigates the moisture balance in a section of the UUT in Suzhou city, eastern China. An experimental dehumidification study was carried out in a 200 m long 4.05 m × 2.5 m cable compartment with the objective to identify major sources and their strengths. Two refrigeration dehumidifiers were used to control the relative humidity. The results show that the most significant moisture source was the outdoor air through ventilation (values dependent on the air change rates), followed by the open water evaporation (~ 4.195 kg/hr) inside the tunnel and the leakage from the neighboring unconditioned compartments. The concrete walls had a strong buffering effect, which was a strong source at the beginning of the dehumidification (~ 17.171 kg/hr). A mathematical model was developed that can predict the tunnel humidity fairly well. The results suggested that the dehumidification needs to be included in the design, construction, and operation of the future utility tunnel. This includes reserved spaces for moisture control systems, an operation strategy for dehumidification, covered drainage system, and quality construction and maintenance.