The study demonstrates how socio-economic factors and water quality issues have influenced human health (diarrheal and skin infections) concerns in the local communities of Bufundi sub county, south western part of Uganda. The socio-economic factors of concern included level of education, number of people in a household, incomes, water storage, water treatment and water sources. Water appearance, nitrogen compounds, and coli forms in river, spring and gravity water sources were determined. A questionnaire and laboratory analyses were applied to generate data. Results show that the chi-square values for the discriminant function between diseased and nondiseased were 30.95 and 25.48 (p=0.001) for diarrhea and skin infection respectively. Most the respondents (68.9%) obtained their water from river and spring water sources, and 77.4% never covered water drinking containers. Results show total coliforms to be 5 times higher (650 CFU/100 ml) in river water than international standards.