Purpose: A waterborne outbreak of acute viral hepatitis (AVH) was reported in an congested and overcrowded urbanized rural area, known as Burail, in Chandigarh, during January to December, 2017. This outbreak was investigated with an objective of describing its epidemiological features, identify the source of contamination and implement the containment measures. Methods & Materials: A house-to-house survey was conducted to identify symptomatic cases, defined as per WHO's standard case definition for acute viral hepatitis, using standard case record form. Laboratory investigation of all the suspected cases was done for Hepatitis A and E virus (HAV & HEV) by enzyme-linked immunosorbent assay method. Environmental investigation included water testing of all the tube wells supplying water in the study area for chlorination and faecal contamination. The outbreak was described in terms of time, person, and place analysis to generate the hypothesis and implement control measures to contain the outbreak. Results: A total of 34,542 individuals were contacted and screened for symptoms of acute viral hepatitis. Hundred fifty four cases of AVH were laboratory confirmed. Out of these, 128 (83.1%) cases were positive for HEV, 21 (13.7%) for HAV, and 5 (3.2%) for both HAV & HEV IgM antibodies. Overall attack rate (AR) was 0.49%. It was highest among the age group of 16-20 years (0.98%), followed by 11-15 years (0.79%). However, all the age groups were affected. The AR among males (0.52%) was higher as compared to the females (0.43%). There were no deaths reported. Environmental investigation confirmed the sewage contamination of drinking water in the distribution system of one of the tube well, where clustering of cases was observed. Conclusion: Dual HAV and HEV outbreak was confirmed that was transmitted by contaminated drinking water in the study area. HEV was the major etiological agent. The recognition of early warning signals, timely investigation, and surveillance of water quality can contain the outbreak.