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Access to “improved” water and sanitation is rapidly expanding in Vietnam. We examined one market-based, NGO-led piped water supply and sanitation program to assess the water quality, health, and other impacts of expanded coverage of specific interventions. This longitudinal, prospective cohort study includes 300 households in seven project areas in central Vietnam: 141 households who paid to connect to a piped water system; 83 households who paid to connect to a piped water system and who paid to install an improved, pour-flush latrine; and another group of 76 control households that did not invest in these specific improvements. The four-month study was intended to measure the impact of the NGO-led water and sanitation programs on households’ drinking water quality and health against control households with a “basic” level of service characteristic of the project areas (majority access to improved drinking water sources and high access to sanitation options of various kinds). We found that: (i), households connected to a piped water supply had consistently improved drinking water quality over those relying on other, non-piped sources; (ii), households investing in a piped water connection (with or without an improved latrine) were at reduced risk of diarrheal diseases compared with households that did not invest in these; and (iii), households paid less per month for piped water and reported greater satisfaction with the service over available alternatives. Finally, although a connection to a piped water supply offers measurable benefits to households at relatively low cost, maintaining water quality and ensuring consistent operation and maintenance represent ongoing challenges to local service providers.