The current study aimed to assess the microbial quality of municipal (tap) and ground (borehole) water in Karachi, Pakistan. A health survey was also conducted to assess possible health risks of the drinking water. Fifty water samples (n = 25 each of tap and ground water) were collected from various locations of five administrative districts of Karachi for bacteriological analysis. In addition, a survey was conducted to assess the impact of drinking water on the health of city residents. Microbiological analysis results showed the presence of total coliform in 48 out of 50 (96%) tested samples. The total viable plate count at 37 °C was >200 CFU/ml in the majority of the collected samples which exceeded the permissible limit set by the World Health Organization (WHO) and the Pakistan Environmental Protection Agency. To evaluate the health risk of contaminated water, a total of 744 residents were interviewed. The information acquired from this field work revealed a high prevalence of waterborne diseases in the order of diarrhea and vomiting > skin problems > malaria > prolonged fever > eye problems and jaundice. To solve water and environmental problems, awareness and regular monitoring programs of water management and safe disposal of waste have been suggested.