Water harvesting is an ancient practice that has been used, mainly in dry environments, to increase efficiency of water collection and use by directing water from a large natural watershed or man-made collection surface into a small basin where the water can be stored in underground reservoirs or to be used directly for irrigation or domestic uses. In modern era water harvesting has been neglected, particularly at the developed countries, due to the technological achievements in the fields of water production and transport. Nevertheless, over recent years, water harvesting in modern-urban environments becomes a necessary practice. The urban regions are being paved and built, resulting in reduction of groundwater recharge area. Consequently, large amount of good quality water that rains over the cities is withdrawn from recharge as it is directed into the municipal drainage system. Moreover, in extreme rain events the drainage systems may be over-flooded which may lead to ecologic and economic hazards. This work reviews the history of rain water harvesting and discusses the impact of rain water harvesting in modern-urban environments on the hydrological system. Two types of rain water harvesting methods are being discussed and compared: storing of the harvested water in reservoirs and direct infiltration of the harvested water into the aquifer. Quantitative examples from Tel-Aviv, Israel are given and indicate that rain water harvesting may play an important role in the local and regional hydrological cycle and that direct infiltration of the harvested water into the aquifer is preferable for heavily populated cities.