There has been considerable debate within federal states about the appropriate role of the federal government in setting national standards. The question of jurisdiction has been a prominent issue with respect to environmental policy, and drinking water, more specifically. For example, concerned citizens and environmental organizations such as the Sierra Legal Defense Fund (2001) have called on the Canadian federal government to issue national standards pointing to the American Safe Drinking Water Act as a benchmark. The centralized American system wherein the federal government effectively regulates states through coercive legal and financial threats is in sharp contrast to the Canadian decentralized model of each province setting its own standards. This important difference between the Canadian and US federal systems presents an opportunity to empirically examine the implications of these two contrasting federalisms. What happens when governments regulate governments within a federal state? The study of regulatory federalism with respect to drinking water policies can shed new light on intergovernmental relations as well as implementation challenges. This paper examines intergovernmental relations at both federal-state and federal-municipal, as well as state-municipal levels. Using a public choice framework and comparative case study methodology the paper examines the hypothesis that while intergovernmental relations will be worse in a top-down model, a regulatory federalism framework in which one level of government regulates another offers better protection for public health. The expectation is that when governments regulate governments, the government being regulated behaves akin to a private actor facing unwanted regulation evidenced, for example, by a focus on economic costs rather than social benefits. As state governments have more resources to protect and more votes to lose, they can be expected to act more adversely to regulation than local governments, though local governments may take on some characteristics of private actors. Finally, safe drinking water quality outcomes depend on the degree to which governments are held accountable in a principle-agent relationship. The six case studies involve three paired Canada-US groupings: (1) Vancouver, British Columbia and Seattle, Washington; (2) Nanaimo, British Columbia and Longview, Washington; and (3) Abbottsford, British Columbia and Whatcom County, Washington. Cases have been paired based on their source waters, population sizes, industries, etcetera, and their variation in governance model with the border as the point of difference via differing federal and provincial regulations. The six case studies fit within a larger research agenda that examines safe drinking water policies in two federal states, Canada and the United States of America. [ABSTRACT FROM AUTHOR]