Provision of safe drinking water is essential for the promotion of human well-being. This paper makes an attempt to examine the patterns of access to drinking water, identify and analyze the factors that influence households access to safe drinking water sources, and analyze factors determining the extent of households travel to fetch drinking water, and assess the effects of access to safe drinking water on human health in Bhutan, using the data from the Bhutan Living Standard Survey 2012 (BLSS 2012). For this, various methodological tools have been adopted such as logistic regression model, censored least absolute deviation model, and the propensity score matching (PSM) approach. The logistic regression results show that households with educated, younger, and male members are more likely to have access to safe drinking water. Wealthier households also prefer safe drinking water than their poorer counterparts. The PSM results suggest that households having access to safe drinking water have fewer stomach disorders and skin diseases, and are likely to incur less expenditure on medicine. Keeping these findings in mind, the paper suggests that the Bhutanese government should invest in water infrastructure, which may lead to a significant reduction in water-borne diseases and health expenditure.