Continuous and reliable power supply plays an important role for water leakage monitoring systems used in urban water supply pipes. Renewable energies powered water leakage monitoring system is becoming a promising way to reduce the dependence on traditional chemical batteries. In this study, an inline vertical cross-flow turbine was developed to harvest the potential hydropower inside water supply pipes for supplying power to the water monitoring systems. Specifically, numerical investigations are carried out on the block shapes of a water turbine system to determine an optimal model. The effects of tip clearance on the turbine performance are conducted and it is found that a smaller tip clearance can reduce the reversing torque on the returning blades and increase the pressure drop through the runner for improving the turbine performance. Besides, a self-adjustable vane is designed to avoid excess water head loss. The simulation results show that the proposed self-adjustable vane is effective to limit the water head loss at high flow velocities (1.5–2.0 m/s) to 5 m. Finally, the turbine prototype is fabricated and tested on a lab test rig. The experimental results indicate that the numerical method adopted in this research is accurate enough for such micro water turbine performance prediction. A month-long test shows that the daily electricity generation of the proposed turbine is about 600 Wh and the water head loss is always below 5 m, which means that the proposed turbine can provide sufficient power for any general water leakage monitoring system without influencing normal water supply.