We assessed the water supply, water quality and human waste disposal and their association with diarrheal illness in Jatinegara, East-Jakarta, where part of the area has been involved in the Kampung Improvement Program (KIP). Three hundred seventy-eight households, randomly selected in the study area, were visited and questioned about water source, sanitation and diarrheal illness during the previous 3 months. Microbiological quality of drinking water was assessed. The water sources were boreholes (243; 64%), the water mains (77; 20%), bottled water (45; 12%), and vendors or dug wells (243; 4%). Fecal coliforms were isolated in 56% of the samples [median 23 (IQR 6-240) /100 ml in the contaminated samples]. Only 2 (3%) of the water mains' samples contained >100 fecal coliforms/100 ml, compared to 57 (24%) groundwater samples. Most residents used private toilets with drainage into on-site septic tanks, yet in over one quarter of households human excreta was disposed of into rivers or gutters. KIP areas lagged behind in environmental hygiene. Diarrheal episodes, reported in one third of the households, were significantly associated with water contaminated with >100 fecal coliforms/100 ml [OR 2.4 (95% CI: 1.4-4.2)], but no association with water source or environmental contamination was found. Significantly, all individuals reported boiling water before consumption.