One of the major issues confronted by the agencies formulating polices for water supply projects in developing countries is how to achieve efficiency, equity and sustainability. Achieving these objectives warrants an understanding of the determinants of household behaviour towards various aspects of water supply projects, such as improved water supply services and the associated willingness to pay value for specified services. Since these determinants are site-specific in nature, it is imperative that the water supply authorities identify and accommodate these factors appropriately in water supply policies. This paper discusses the results of a case study that looked into identification of such determinants of household behavior in relation to improved water supply services in a peri-urban context in Tamil Nadu, India.