This paper presents a low cost and holistic approach to the water quality monitoring problem for drinking water distribution systems as well as for consumer sites. Our approach is based on the development of low cost sensor nodes for real time and in-pipe monitoring and assessment of water quality on the fly. The main sensor node consists of several in-pipe electrochemical and optical sensors and emphasis is given on low cost, lightweight implementation, and reliable long time operation. Such implementation is suitable for large scale deployments enabling a sensor network approach for providing spatiotemporally rich data to water consumers, water companies, and authorities. Extensive literature and market research are performed to identify low cost sensors that can reliably monitor several parameters, which can be used to infer the water quality. Based on selected parameters, a sensor array is developed along with several microsystems for analog signal conditioning, processing, logging, and remote presentation of data. Finally, algorithms for fusing online multisensor measurements at local level are developed to assess the water contamination risk. Experiments are performed to evaluate and validate these algorithms on intentional contamination events of various concentrations of escherichia coli bacteria and heavy metals (arsenic). Experimental results indicate that this inexpensive system is capable of detecting these high impact contaminants at fairly low concentrations. The results demonstrate that this system satisfies the online, in-pipe, low deployment-operation cost, and good detection accuracy criteria of an ideal early warning system.