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Many people especially in developing countries do not have access to safe and adequate potable water services. Providing safe potable water services to the peoples of developing countries at the right location and at the affordable price is one of the challenging problems. Cost recovery should be basic water law policy of these countries to address the issue. However, market price reflects people''s willingness to pay only for marketable goods and services. Markets will not always best in allocating environmental resources due externalities, public goods, decrease costs in supply, and high transaction costs. Non-market valuation techniques are used for valuing the value of environmental resource. In this study the Contingent Valuation Method (CVM) - one of the most widely used non-market valuation technique - is employed to analyze households willingness to pay for improved water services by taking Debre Zeit town (from Ethiopia) as case study. The CVM measure both use and non-use values of improved water projects.