Urban sprawl and population increase are fundamentally transforming periurban areas in the Global South. These areas often suffer from inadequate environmental planning, resulting in water sources being overexploited, degraded, and redistributed. These processes affect water-based livelihoods due to disadvantages in water access and inadequate water governance. On the positive side, these transformation processes are leading to alternative water-based livelihoods. We systematically review and critically comment on the literature on water-based livelihoods in periurban areas of the Global South to provide the current scientific knowledge on this topic. Transformations of water-based livelihoods in periurban areas were also evaluated in terms of their sustainability. We conclude that rapid developments of periurban areas contain threats and potentials for water-based livelihoods and some emerging water-based livelihoods, whereas some emerging water-based livelihoods provide interim solutions for institutional supply gaps. Major lacunae in research are the (1) lack of holistic approaches, which address social dimensions of transformations, (2) the lack of studies applying a differentiated perspective on neighbouring areas within the urban fringe and (3) a lack of knowledge on emerging (water-based) livelihoods.