Now a day's water pollution has caused incoveriences for people whom live near the Pavana river in Pune city, India. The river water quality has deteriorated by major water quality parameters like dissolved oxygen (DO), biological oxygen demand (BOD) and phosphates level. In present study it is tried to find people's willingness to pay (WTP) for improvement of river water quality. Contingent valuation method (CVM) was utilized for valuation of river water quality in Pavana river. Five categories of users have been chosen and then interviewed: households, farmers, fishermen, washing clothes women, bath taking people. One kilometer from each side of river was covered by researchers for sampling. Mean of willingness to pay was estimated at Rs 17.6 (45 Indian Rupees=$ 1) per family per month. This research shows CVM applicablity and the importance of river quality for Pune city and can effectively be used in developing countries.