The rural population in the Dry Zone of Sri Lanka is largely affected by Chronic Kidney Disease of Unknown etiology (CKDu). According to the multidisciplinary research carried out so far, quality of groundwater is considered one of the possible causative factors for CKDu. Therefore, assessment of the quality of groundwater being used for drinking and its evolution mechanism is the key to identifying the linkage between CKDu and drinking water. This study aimed to perform a detailed investigation on groundwater sources using isotopic, chemical, and hydrogeological methods in the CKDu-endemic (site A) and the control area (sedimentary formation—site B) in the Malwathu Oya basin and the control areas in the Malala Oya basin (site C) selected for a systematic comparison. Our investigation shows that elevated levels of TDS, magnesium, and fluoride in the shallow groundwater affected by climatic, geochemical, and hydrogeological processes may contribute to the CKDu in the Dry Zone of Sri Lanka. All the groundwater samples analysed have exceeded the hardness threshold. Prominent Mg hardness proportion together with excess F− in the CKDu endemic area may produce nephrotoxic MgF2 complexes that may trigger renal damage. In contrast, NaF complexes in the CKDu control area leads to reduction of F− toxicity in the human body. Elevated F− and Mg2+ are found in site A, low F− and high Mg2+ in site B, and either combinations of low F− and low Mg2+, high F− and low Mg2+, or low F− with high Mg2+ in site C. TDS, hardness, Mg2+, Na+, and F− are formed with different mechanisms in the three selected areas. The primary process that regulates the evolution of groundwater types and contents in sites A and C is the weathering of silicates. Similarly, in site A, carbonate dissolution and reverse ion exchange are quite strong. Cation exchange and evaporite dissolution are more pronounced in site C. Shallow groundwaters are evapo-concentrated, hence their quality deteriorates more significantly than the deep groundwater in the CKDu endemic area. Dilution decreases the ion content in site A while evaporite dissolution increases it in site C after the rainy season. Evaporation and seawater mixing affect the quality of groundwater in site B. It is also found that a statistically significant difference exists in the F−/Na+, F−/Mg2+, and F−/Ca2+ between the endemic and control areas. Intensive rock weathering combined with desorption has added excess F− to the groundwater in site A, while cation exchange and fluorite dissolution are contributing factors in site C.