The current study evaluates the determinants of health cost due to drinking arsenic contaminated groundwater based on primary data collected from the village of Tando Allahyar. The study applies the ordinary Least Square (OLS) procedure to a primary survey of 150 households. It had 784 family members in which 385 and 389 were male and female. The minimum and maximum age of the respondents were 19 and 70 years in the sample survey. Average education of the respondents in our sample was 7 years of schooling while 32% were uneducated and 17% respondents have done graduation. Questions were asked about awareness of contaminated water with arsenic, water quality and availability of safe sources of water through questionnaires. To check the quality of water (arsenic concentration) samples were carefully analyzed from drip (Drainage and Reclamation Institute of Pakistan) Tando Jam. Laboratory report revealed that groundwater is unfit for drinking because of the high amount of arsenic in the groundwater used by Households. Around 90 percent of groundwater samples were polluted with various levels of arsenic concentration above WHO (10 ug/l or PPB) and country’s (50ug/l or PPB) safe limit. Our results revealed that most of the residents are unaware about arsenic poisoning and its adverse health impacts. Due to consistent and long year’s use of highly polluted groundwater with arsenic, residents are facing different kinds of health problems. About 54% respondents reported Skin diseases, 37% exposed to gastrointestinal problems and 16% are facing liver failure (Hepatitis) disease. Kidney, Lung failure, and chest diseases (Asthma and Tuberculosis) are also present in the study area. In addition to this, people also lost their lives due to high arsenic concentration in drinking water. Majority of these people were only earning hands of their families. Many households did not take any treatment because of financial constraint. This also leads to deteriorate the health among community members. OLS results show that number of visits to the doctor, water quality and interaction term of water source and arsenic concentration have significant positive relation with total health cost. Which ultimately uncovered that drinking groundwater from long years polluted with arsenic increases the direct and indirect health cost of the respondents in the study area. Supervisor:- Dr. Abedullah