This study analyzed the status of drinking water supply and quality and customers willingness to pay for improvement in drinking water supply and quality in Multan city. Required information was collected from through stratified sample of selected 210 households from Shah-Rukun-e-alam and Mumtazabad. The contextual information was analyzed through descriptive statistics and weighted average indexes whereas the demand function for hypothetical improvements was determined using multiple bound choice Contingent Valuation Method (CVM) and Logit regression. The findings revealed that respondent accorded high importance to safe drinking water compared with other household needs. This was because of their high level awareness about the link between health and safe drinking water. Respondents used multiple sources of drinking water. Tap water, water from public filtration plants and borehole were the primary, secondary and tertiary water sources, respectively, in the study area. Most of the households perceived the quality of their existing drinking water as good for drinking purposes. Such perception was not well grounded as most of them relied on their sensory appraisals of water quality and only a little more than one fourth of them had tested their water from laboratory. In such situation, despite awareness insignificant attention has been devoted to in-house water treatment. Situation of drinking water storage was relatively satisfactory as about half of the respondents were using insulated and simple plastic canes cleaned on weekly basis while most of the remaining households were storing it in rooftop tanks cleaned twice a year. Almost all of those bringing water from publically installed filter plants were storing it in cane. While half of those using tap water for drinking purposes were storing it directly from supply line before it is released into rooftop tank for washing purposes. The remaining half of the households using tap water were storing it in rooftop tanks and using it for all purposes including drinking. Despite high level of satisfaction with water quality and supply, people could come with the demand for some of the improvements. Seemingly, demand for improvement in supply parameters has exceeded that of the quality parameters. Even in service improvement, high demand was observed for improving reliability through installation of generators and establishment of customer care. Most of the respondent realized government budget constraints in providing demanded improvement. Within the bounds of certain degree of surety and confidence, it would be safe to expect that significant majority of the respondents would pay PKR 100 in addition to the amount they are paying at the moment. Most the WTP in this study is explained by level of people’s awareness about the water and health consciousness. Among the most significant variable leading to major increase in peoples WTP included per head income, number of children under 14 years age, knowledge about health and water linkage, knowledge about the actual water quality tested through laboratory explained major proportion for their WTP for improved drinking water quality and supply. The study recommend different options as mobile water testing laboratory and health care complain through clinics, use electric and print media for raising awareness in order to raising people’s WTP for safe drinking water. Supervisor:- Dr. Junaid Alam Memon