Access to safe water sources, whenever needed, is a human right. However, attending to this fundamental right remains challenging in informal settlements. Consequently, these settlements are more exposed to risk factors of several diseases related to the lack of safe water, notably diarrheal diseases. Transitional water distribution systems are needed as “conventional” distribution systems fail to expand as fast as human settlements. In Nairobi, Kenya, alternative systems have emerged, both in the formal and informal sectors. These systems deserve further investigation to assess, in practice, their benefits. We conducted a cross-sectional study based on 1,147 household surveys to assess the “efficacy” and "health benefits" of different water distribution systems in two informal settlements in Nairobi. These systems were the exposure of interest; they were categorized into three types: piped to premises, public tap/dispenser, and street vendor. The first outcome of interest, “efficacy,” was measured through the availability of drinking water in the month preceding the survey. The second, "health benefits,” was measured through the occurrence of diarrhea. We calculated adjusted odds ratios (AORs) stratified by age groups to assess correlations between exposures and outcomes while accounting for relevant diarrhea covariates. Regarding efficacy, only public taps/dispensers showed a significant association with water availability (AOR = 1.43; 95% CI: 1.04–1.96). Street vendors showed a positive association but did not meet conventional significance thresholds (AOR = 2.05; 95% CI: 0.975–4.31). As for health benefits, public taps/dispensers were significantly associated with lower odds of diarrhea in children under five (AOR = 0.56; 95% CI: 0.32–0.99), while water from street vendors was significantly associated with higher odds in the general population (AOR = 2.03; 95% CI: 1.03– 4.01). The higher odds of water availability from public taps/dispensers and street vendors are certainly due to the flexibility and capillarity of such systems, which are decentralized and more resilient. Water safety, however, was not observed among street vendors. There is a delicate balance to be found in transitional water distribution systems between water safety and availability, and public water dispensers seemingly offer such balance.