This study determined the total and speciated arsenic (As) concentrations and other health-related water quality parameters for unraveling the health risk of As from drinking water to humans. Groundwater samples (n = 62) were collected from three previously unexplored rural areas (Chichawatni, Vehari, Rahim Yar Khan) of Punjab in Pakistan. The mean and median As concentrations in groundwater were 37.9 and 12.7 µg·L−1 (range = 1.5–201 µg·L−1). Fifty three percent groundwater samples showed higher As value than WHO safe limit of 10 µg·L−1. Speciation of As in groundwater samples (n = 13) showed the presence of inorganic As only; arsenite (As(III)) constituted 13%–67% of total As and arsenate (As(V)) ranged from 33% to 100%. For As health risk assessment, the hazard quotient and cancer risk values were 11–18 and 46–600 times higher than the recommended values of US-EPA (i.e., 1.00 and 10−6, respectively). In addition to As, various water quality parameters (e.g., electrical conductivity, Na, Ca, Cl−, NO3−, SO42−, Fe, Mn, Pb) also enhanced the health risk. The results show that consumption of As-contaminated groundwater poses an emerging health threat to the communities in the study area, and hence needs urgent remedial and management measures.