Low income households frequently struggle with the challenge of ensuring access to clean water. The usage of contaminated water exposes individuals to a myriad of diseases. This study aims to examine the impact of contamination free water usage on the health status of children of low income households, leveraging data from Luby et al. (2015) who conducted Randomized Control Trial to examine the impact of the installation chlorine dispenser on improvement of water quality. We used their treatment variable the installation chlorine dispenser as an instrumental variable and their outcome variable, contamination free water usage, as our treatment variable. The study considered 602 children aged more than one year to four years from two low-income communities living in Dhaka as units of analysis. The results show a significant improvement in health conditions of children as a result of using contamination free water. Specifically, the probabilities of respiratory disease and diarrhea occurrence decrease at the 1% significance level as a result of using contamination free water.