Data collected in the late 1980s from eight countries in Sub-Saharan Africa (Burundi, Ghana, Togo, and Uganda), Asia/North Africa (Sri Lanka and Morocco), and the Americas (Bolivia and Guatemala) were combined and analyzed to test whether incremental health effects regarding diarrhea and nutritional status result from incremental improvements in water and sanitation conditions. Rural (n = 11, 992) and urban (n = 4, 888) samples were analyzed separately. Optimal (i.e., on the premises) and intermediate (improved public water). water supplies were compared with unimproved water conditions. Optimal (flush toilets or water-seal latrines) and intermediate (latrines) sanitation levels were compared with unimproved sanitation. Nationally representative (random) samples of ever-married women aged 15–49 years, with or without children, were interviewed in all countries, and children aged 3–36 months with available weight and height data were included in the analyses. Multiple linear regression controlled for household, maternal, and child-level variables; in addition, dummy variables were included for each country. Improvements in sanitation resulted in less diarrhea and in taller and heavier children with each of the three levels of water supply. Incremental benefits in sanitation were associated with less diarrhea and with additional increases in the weights and heights of children. The effects of improved sanitation were greater among urban dwellers than among rural dwellers. Health benefits from improved water were less pronounced than those for sanitation. Benefits from improved water occurred only when sanitation was improved and only when optimal water was present. These findings suggest that public health interventions should balance epidemiologic data with the cost of services and the demand for water. There should be efforts to develop compatible technologies so that incremental improvements in service can be made.