The city of Perth in Western Australia is facing a future of compromised water supplies. In recent years, this urban region has been experiencing rapid population growth, coupled with drying climate, which has exacerbated water shortages. As part of the government strategy to secure water sustainability and to address an agenda focused on all elements of the water cycle, a target of 20% reuse of treated wastewater by 2012 was established. This includes a feasibility review of managed aquifer recharge for indirect potable reuse. A characterization of contaminants in wastewater after treatment and an assessment of the health implications are necessary to reassure both regulators and the public. To date, the commonly used approach involves a comparison of measured contaminant concentrations with the established drinking-water standards or other toxicological guidelines for the protection of human health. However, guidelines and standards have not been established for many contaminants in recycled water (unregulated chemicals). This article presents a three-tiered approach for the preliminary health risk assessment of chemicals in order to determine key contaminants that need to be monitored and managed. The proposed benchmark values for the calculation of risk quotients are health based, systematically defined, scientifically defensible, easy to apply, and clear to interpret. The proposed methodology is based on the derivation of health-based levels for unregulated contaminants with toxicity information and a "threshold of toxicological concern" for unregulated contaminants without toxicity data. The application of this approach will help policymakers set guidelines regarding unregulated chemicals in recycled water.