In the context of smart city development and rapid urbanization worldwide, urban water supply system (UWSS) has been of vital importance to this process. This paper presents a comprehensive review on the transient flow research for UWSS management. This review consists of two aspects as follows. The first aspect is about the development and progress of current transient theory, including transient flow models, unsteady friction and turbulence models, and numerical simulation methods. The other aspect is about the utilization and application of transient-based methods for effective UWSS diagnosis and management, including leakage, discrete and extended partial blockages, unknown branch, and other defects in water pipelines. A total of 228 publications have been reviewed and analyzed in this paper. In addition to the state-of-the-art progress and achievement of the research on transients, the advances and recommendations of future work in this field are also discussed for the development and management of next-generation smart UWSS in the paper.