A study was carried out to assess the water quality situation of groundwater sources in Kathmandu Valley, Nepal. Groundwater has remained to be a major water supply source for a population of 1.5 million at present in the valley. The focus of this study was to evaluate the extent and sources of groundwater contamination. Water sampling was carried out in selected deep wells and shallow sources. The level of pollution was evaluated by comparing the water quality results with WHO guidelines. The major problems with the dug wells, hand pumps and spouts were found to be the elevated nitrate and mercury contents. The deep wells located on the central aquifer were found to have a serious threat of ammonia pollution. Deep wells were also found to have iron, manganese and mercury concentrations exceeding the guideline values. Multivariate statistical analysis was carried out to cluster the sampling sources and identify the common factors describing the potential sources and possible mechanisms associated with the contaminants. The results suggested that disintegration of the sediment organic matter under strong reducing environment leads to the origin of the unusual water qualities at the central confined aquifer. This process may be microbially mediated and occurs with the simultaneous reduction of species such as arsenic, iron, manganese and sulfate. Both natural and anthropogenic water quality problems were observed in the groundwater system of Kathmandu valley. Attention should be focused to consider distinct strategies to address these problems.

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