This study investigated the association of flood/stagnant water (FSW) with various health outcomes among respondents living in urban slums of Dhaka and adjacent rural areas. We also assessed the differences of individual-, household- and area-level characteristics between the FSW-affected and non-affected areas. Bangladesh as a whole and slums in the megacity of Dhaka in particular are severely affected by the FSW. Data were collected from 3,207 subjects (aged 10+ years) through baseline surveys conducted in March 2008 and 2009. Twelve big slums in Dhaka and three adjacent villages were selected as study areas. Face-to-face interviews using a multidimensional pre-tested questionnaire were conducted by the trained university graduates. We performed various types of analyses ranging from the simple frequency analysis to the multivariable-adjusted logistic regression modelling. Our empirical findings suggest that slums were more affected by the FSW as compared to the rural areas. People living in the FSW-affected areas were more vulnerable in terms of individual-, household- and area-level characteristics than non-affected people. Age was also significantly associated with various health outcomes. According to multivariable analyses controlled for various factors, the FSW-affected people reported significantly higher likelihoods of health symptoms (namely fever, cold/cough, weakness), communicable diseases (namely diarrhoea and gastric disease) and poor mental well-being as compared to the non-affected people. Only the burden of non-communicable diseases was lower in the FSW-affected areas than the non-affected areas. Our findings lead us to conclude that the FSW-affected area is an independent risk factor for various physical and mental health problems. Urban slums are more affected than rural areas by the FSW. Therefore, we underscore the necessities of well-designed and comprehensive public health interventions focusing on individual, community and higher levels of interventions to reduce the FSW-related health and other consequences among the people living in the FSW-affected areas and urban slums in the rapidly growing city of Dhaka, Bangladesh.