Small islands that support urban communities provide a unique opportunity to study the urban water cycle, its energy needs, and possible links to renewable energy. The aim of this paper is to explore to what extent an island’s urban water cycle and the renewable electricity production system required to satisfy the urban water cycle’s demand can become sustainable using Caye Chapel (Belize) as a study case. For this research, the water-energy system is the urban water cycle and the renewable electricity production for the urban water cycle. Twelve alternatives were proposed for the water-energy system. The different alternatives are divided among those that consider the reuse of wastewater, rainwater harvesting, and the use of wind turbines, PV panels, or both for the renewable electricity production. Then, those alternatives were optimized to produce the minimum water demand shortage, minimum amount of treated water that is not reused, and renewable electricity shortage. Later, the optimized alternatives are evaluated using multi-criteria decision analysis (MCDA). It was observed that the alternatives that only consider one renewable source for the electricity generation and do not consider the reuse of wastewater, are outperformed by the alternatives that consider more than one renewable source and reuse the treated wastewater.