Intraurban differentials in safe drinking water in developing cities have been exacerbated by rapid population growth that exceeds expansion of local water infrastructure. In Accra, Ghana, municipal water is rationed to meet demand, and the gap in water services is increasingly being filled by private water vendors selling packaged “sachet” water. Private sector sale of sachet water has grown to fill an important gap in household water security, and consumption of sachet water has been on the rise in West Africa over the last decade. Sachets extend drinking water coverage deeper into low-income areas and alleviate the need for safe water storage. This potentially introduces a health benefit over stored tap water, but at an additional cost both financially and environmentally. The long-term implications of these changing consumption patterns remain unclear. This work begins by reviewing recent shifts in drinking water sources from recent Ghana Demographic and Health Surveys, as well as the history, economics, quality, and regulation of sachet water in Ghana’s Accra-Tema Metropolitan Area. It proceeds to explore correlates of using sachets as the primary drinking water source for two large samples of women drawn from separate household surveys in Accra, and investigates links between sachet water and reported diarrhea episodes in a subset of children under five. Within Accra’s slums, neighborhood water rationing and lower socioeconomic status tend to increase a household’s likelihood of buying sachet water, and sachet customers tend to be the poorest of the poor. Sachet use is also associated with higher levels of self-reported overall health in women, and lower likelihood of diarrhea in children. More broadly, after controlling for all socioeconomic groups in Accra, sachet use is associated with younger age, lower overall health, and neighborhood water rationing. Sachet water consumption also seems to have transitioned from an initial luxury good of the rich to a widespread phenomenon of the urban poor between 2008 and 2010. Given the pros and cons of sachet water, a more holistic understanding of the drinking water landscape is necessary for municipal planning and sustainable drinking water provision. The implications for learning from the sachet phenomenon in Accra and other sub-Saharan cities facing drinking water shortages are discussed in closing.