We assessed fecal contamination of drinking water in households in 2 peri-urban communities of Lima, Peru. We measured Escherichia coli counts in municipal source water and, within households, water from principal storage containers, stored boiled drinking water, and water in a serving cup. Source water was microbiologically clean, but 26 (28%) of 93 samples of water stored for cooking had fecal contamination. Twenty-seven (30%) of 91 stored boiled drinking water samples grew E. coli. Boiled water was more frequently contaminated when served in a drinking cup than when stored (P < 0.01). Post-source contamination increased successively through the steps of usage from source water to the point of consumption. Boiling failed to ensure safe drinking water at the point of consumption because of easily contaminated containers and poor domestic hygiene. Hygiene education, better point-of-use treatment and storage options, and in-house water connections are urgently needed.