Flow carrying capacity of water distribution systems is getting reduced by deterioration of pipes in the systems. The objective of this paper is to present a managerial decision-making model for the rehabilitation of water distribution systems with a mininum cost. The decisions made by the model also satisfy the requirements for discharge and pressure at demanding nodes in the systems. Replacement cost, pipe break repair cost, and pumping cost are considered in the economic evaluation of the decision along with the break rate and the interest rate to determine the optimal replacement time for each pipe. Then, the hydraulic integrity of the water distribution system is checked for the decision by a pipe network simulator, KYPIPE, if discharge and pressure requirements are satisfied. In case the system does not satisfy the hydraulic requirements, the decision made for the optimal replacement time is revised until the requirments are satisfied. The model is well applied to an existing water distribution system, the Seoul Metropolitan Water Supply System (1st Phase). The results show that the decisions for the replacement time determined by the economic analysis are accepted as optimal and hydraulic integrity of the system is in good condition.