Diarrhoeal diseases are among the leading causes of morbidity and mortality in children in low-and middle-income countries. Although the government of Ghana has implemented some interventions with reasonable successes over the years, diarrhoea morbidity still remains a public health concern. For instance, it was reported in the 2008 Ghana Demographic and Health Survey (GDHS) that one out of every five (20%) children below five years of age had diarrhoea in the two weeks preceding the survey while the 2014 GDHS revealed an incidence of 12%. This paper examines the association between source of drinking water and the prevalence of diarrhoea among children aged under-five years using propensity score matching. The study found that drinking from improved water sources rather increases the odds of diarrhoea by about 1.3 times and this effect persists in both the unmatched and matched samples. We proffer potential explanations for this rather puzzling finding. The paper concludes that the Ghana Standards Authority should regularly monitor sachet water and other 'improved water sources' for its microbial quality to ensure that Ghanaians are offered clean and safe drinking water in order to curb the incidence of diarrhoea among children.