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The interest in greywater reuse as an alternative water supply is increasing in most part of the World. In Perth, Western Australia (WA), an industrial association to promote greywater reuse named Grey Water Industry Group (GWIG) has been established. Malaysia is a country seemingly endowed with abundant water resources with an annual average rainfall of more than 2000 mm. Despite its high rainfall and water resources compared to other regions in the world, Malaysia still suffers water problems (both excesses and deficits). The present work describes the suitability of greywater reuse in water supply strategy and wastewater management in Malaysia in comparison to that applied in Australia. Greywater should not be seen as a waste product, but as a valuable resource in wastewater management. Based on the comparison study between Australia and Malaysia, it appeared that the adoption of greywater treatment in Malaysia is more feasible and meaningful than the reuse approach, which creates problems in some instances when the greywater system is inappropriately designed for the type of environment. However, proper legislation, awareness and environmental considerations in terms of geochemistry characteristics, selection of the treatment method and the need for a paradigm shift are essential keys to ensuring optimum utilization of greywater as a future water resource in Malaysia.