To address the problem of the health impacts of unsafe drinking water, methods are needed to assess microbiologic contamination in water. However, indicators of water quality have provided mixed results. We evaluate five assays (three for Escherichia coli and one each for enterococci and somatic coliphage) of microbial contamination in villages in rural Ecuador that rely mostly on untreated drinking water. Only membrane filtration for E. coli using mI agar detected a significant association with household diarrheal disease outcome (odds ratio = 1.29, 95% confidence interval = 1.02-1.65 in household containers and odds ratio = 1.18, 95% confidence interval = 1.02-1.37) in source samples. Our analysis and other published research points to the need for further consideration of study design factors, such as sample size and variability in measurements, when using indicator organisms, especially when relating water quality exposure to health outcomes. Although indicator organisms are used extensively in health studies, we argue that their use requires a full understanding of their purposes and limitations.