This study aims at quantification of health losses, considering social and environmental factors. Morbidity and mortality cases of diarrhoea for children under five years old were used to estimate the disability adjusted life years (DALYs) lost for the target households in low-income communities in Dhaka, Bangladesh. Water supply facilities and sanitation systems, along with hygiene practices and their health outcomes, were studied at community level. Demographic, socio-economic and socio-cultural aspects were also studied to support the research findings and give a better understanding of the local conditions. The four selected communities, Ward 60 (W60), Ward 61 (W61), Ward 62 (W62) and Ward 65 (W65), all had different existing urban services such as water supply, sanitation, garbage management and drainage facilities. All of these services existed in W62, but W60 did not have any of the services; W61 had sanitation and drainage coverage, whereas W65 had only a water supply facility. The results conclusively showed that, compared with the null (absence of services) scenario (W60), the other three scenarios (W61, W62 and W65) showed a substantial decrease of diarrhoea (1.219, 1.284 and 2.052 DALYs/household/year, respectively) reported for children under five years old. Besides urban services, other socio-economic characteristics might also influence the prevalence of diseases.