We investigate the effect of water quality on the educational outcomes of children aged 8–11 in 39 districts in five states in the Ganges Basin of India. Using data from the Centre for Pollution Control Board of India and the Indian Human Development Survey (IHDS) 2011–12, we study the effect of water quality in the Ganges Basin on the performance in three test scores. Our evidence suggests that faecal coliform levels in water sources above safety thresholds negatively affect reading and writing test scores. The effects of Nitrate-N and Nitrite-N in the water appear to be weaker compared to those of faecal coliform. The results establish that water pollution caused by excessive presence of faecal coliform is an important environmental factor in determining educational outcomes of children. High levels of faecal coliform in the water could be lowering cognitive abilities of the pollution-affected children through the channel of waterborne diseases.