Water-lead levels were measured in the homes occupied during the first year of life by 77 mentally retarded children aged two to six years and 77 non-retarded matched controls, and in the homes occupied by their mothers during pregnancy. The water-lead content was significantly higher in the retarded group, and the probability of mental retardation was significantly increased when water lead exceeded 800 mug. per litre. Blood-lead levels were also significantly higher in the retarded group. It is concluded that lead contamination of water may be one factor in the multifactorial aetiology of mental retardation and that every effort should be made to reduce the lead content of drinking-water.