The fields of global health and international development commonly cluster countries by geography and income to target resources and describe progress. For any given sector of interest, a range of relevant indicators can serve as a more appropriate basis for classification. We create a new typology of country clusters specific to the water and sanitation (WatSan) sector based on similarities across multiple WatSan-related indicators. After a literature review and consultation with experts in the WatSan sector, nine indicators were selected. Indicator selection was based on relevance to and suggested influence on national water and sanitation service delivery, and to maximize data availability across as many countries as possible. A hierarchical clustering method and a gap statistic analysis were used to group countries into a natural number of relevant clusters. Two stages of clustering resulted in five clusters, representing 156 countries or 6.75 billion people. The five clusters were not well explained by income or geography, and were distinct from existing country clusters used in international development. Analysis of these five clusters revealed that they were more compact and well separated than United Nations and World Bank country clusters. This analysis and resulting country typology suggest that previous geography- or income-based country groupings can be improved upon for applications in the WatSan sector by utilizing globally available WatSan-related indicators. Potential applications include guiding and discussing research, informing policy, improving resource targeting, describing sector progress, and identifying critical knowledge gaps in the WatSan sector.