This article examines the spatial practices and forms of institutionalization in the water and water sanitation sector in Jakarta, capital of Indonesia, and especially in Kampung Kojan in the Kalideres subdistrict of Jakarta. To this end, it develops a three-layered analytical framework viewing the city as a multi-scalar socio-ecological system in which different forms of human–water relations and their institutionalization are found. Particular attention is given to informality in this system and how it interacts with ‘regular’ state and corporate market sector practices. Within these interactive dynamics, informality is not only understood as a survival strategy but also as a creative practice connecting various social-ecological opportunities, traditional and contemporary technologies and modes of institutionalization to each other. Ongoing institutionalization processes in the formal and informal economy, as well as between them, are analysed. Opportunities to integrate and regularize the diverse water sanitation services into community-led closed water–wastewater cycles capable of ensuring public health and sustaining a bio-hydrological balance at the local level are explored.