Abstract: Research study was conducted from January to May, 2002 in residential areas along the Palosi Drain, Peshawar. Main objective of the study was to evaluate water quality of shallow and deep wells in the vicinity of Palosi Drain. For this purpose, 20 water samples were taken 13 from shallow wells, 3 from deep wells and 4 from wastewater in the Palosi Drain. Water samples were analyzed for heavy metals or trace elements (Cd, Pb, Ni, Cu, Fe, Zn, Mn). The results indicated that heavy metals such as Cd, Ni and Pb caused problem at some locations due to their elevated concentrations (0.04, 0.38 and 0.29 mg l‾1, respectively) as compared to WHO`s drinking water standards. The reason could be the corrosion of plumbing fixture and piping fixtures. However, other trace elements such as Cu, Fe, Zn and Mn were not a problem as their average concentrations (0.20, 0.30, 0.40 and 0.16 mg l‾1, respectively) were within the WHO`s drinking water standards. It may be concluded that drinking water was generally of good quality and wastewater did not affect the water quality of shallow wells.