Much of the solid waste stream in the United States is generated by metropolitan areas, while associated landfills are often located in adjacent rural communities. Landfill disposal of municipal solid waste often creates external costs to nearby residents. Contingent valuation was used to estimate external costs of siting a landfill in the Carter community of Knox County, Tennessee. Estimates of annual external costs were $227 per household. Household income, size, years in the community, and distance from the proposed landfill and the respondent's education, sex, and perception of health risks were important in determining a household's willingness to pay to avoid having a landfill in the Carter community. Also, households whose drinking water supplies were at risk of contamination were willing to pay $141 more than those who used piped city water or bottled water.