Even though the human being cannot live without water it has the negative effect on human health too. Its effect depends on the quality of water which human beings drink. The contaminated water used by human beings may degrade human health with the help of some toxic substances, like, fluoride, arsenic, mercury, lead etc. The poor people are prone to suffer from these toxic substances although they, generally, cannot afford for the water of good quality for drinking and washing. Moreover, there is a lot of water-washed diseases, water based diseases, water born diseases etc. which affect human health. These diseases and toxic substances increase health expenditure of the people. Therefore, contaminated water forces the poor people to stay in the vicious circle of poverty if they use it. This paper will analyze water, poverty and health expenditure nexus.