Background Bacterial contamination of drinking water is a major public health problem in rural areas of sub-Saharan Africa. Unimproved water sources are a major reservoir of Escherichia coli ( E. coli ) causing severe diarrhoea in humans. This study assessed E. coli counts in drinking water from different sources and their relationship with water source protection status and neighbourhood sanitation and hygiene practices in rural villages of Mohale Basin in Lesotho. Methods Thirty drinking water sources were purposively sampled and their water analysed for E. coli counts. The types of water sources, their protection status and neighbourhood sanitation and hygiene practices in their proximity were also assessed. E. coli counts in water samples were compared to water source protection status, neighbourhood sanitation, hygiene practices, livestock faeces and latrine proximity to water sources. Results E. coli counts were found in all water samples and ranged from less than 30 colony-forming units (cfu)/100 ml to 4800 cfu/100 ml in protected sources to 43,500,000 cfu/100 ml in unprotected sources. A significant association between E. coli counts in drinking water samples and lack of water source protection, high prevalence of open defecation (59%, n = 100), unhygienic practices, livestock faeces and latrine detections in proximity to water sources was found in the study ( P < 0.05). Conclusion Water sources in studied villages were contaminated with faeces and posed a health risk to consumers of that water. Community-led sanitation and hygiene education and better water source protection are urgently needed.