THIS YEAR'S WATERMARK WINNERS show there's a lot of great design out there. In kitchens, high-end, Old World luxury is still going strong, but architects and builders are striving for even higher levels of detail with this ageless look. Contemporary kitchens still rule in some quarters, with designers moving in one of two directions: toward soft, muted tones that help the kitchen blend in with the rest of the house or hot pops of color that draw attention to a home's most used room. As for baths, the trend toward mini (and not so mini) spa-like sanctuaries continues to grow. But look for more Zen-like touches of nature rather than glitzy fixtures and too much marble.

Backing up all the great materials and state-of-the-art gear are design plans that focus on what people really want from their kitchens and bathrooms: rooms that work hard, look smart, and feel great—all at the same time.

Mid-Century Makeover: Brown Residence, San Francisco Work Zone: McDermott/Gentner Residence, Washington Open Spaces: Contemporary Georgetown Kitchen, Washington Good Connections: Pierce Residence, Vienna, Va. Elbow Room: Haggar Residence, Edina, Minn. Center Stage: Mountaintop Rustic Retreat, Frankfurt, Mich. Natural Sanctuary: Master Bath Pavilion, Baltimore On Display: Wasiak Residence, Baltimore Family Headquarters: The Aubrey, Oconomowoc, Wis. The Real Deal: Custom Residence, Scottsdale, Ariz. Visual Cues: Nichols Residence, Washington Material World: Wang Residence, Mendota Heights, Minn. Hidden Assets: Private Residence, Southlake, Texas Less Is More: Private Residence, Chicago Mission Organization: Ultimate Family Home, Las Vegas Separate Quarters: Thurman Residence, Spring, Texas Elegant Touch: Haynes Residence, Kenilworth, Ill.