The concentrations of heavy metals such as Cd, Cr, Cu, Mn, Ni, Pb and Zn were investigated in drinking water sources (surface and groundwater) collected from Swat valley, Khyber Pakhtunkhwa, Pakistan. The potential health risks of heavy metals to the local population and their possible source apportionment were also studied. Heavy metal concentrations were analysed using atomic absorption spectrometer and compared with permissible limits set by Pakistan Environmental Protection Agency and World Health Organization. The concentrations of Cd, Cr, Ni and Pb were higher than their respective permissible limits, while Cu, Mn and Zn concentrations were observed within their respective limits. Health risk indicators such as chronic daily intake (CDI) and health risk index (HRI) were calculated for adults and children separately. CDIs and HRIs of heavy metals were found in the order of Cr > Mn > Ni > Zn > Cd > Cu > Pb and Cd > Ni > Mn > Cr > Cu > Pb > Zn, respectively. HRIs of selected heavy metals in the drinking water were less than 1, indicating no health risk to the local people. Multivariate and univariate statistical analyses showed that geologic and anthropogenic activities were the possible sources of water contamination with heavy metals in the study area.