Nitrate in drinking water is a contaminant which can affect human health and has been associated with an increased risk of, amongst other diseases, colorectal cancer. Based on epidemiologic data from Denmark on the association between drinking water nitrate and colorectal cancer, the health and economic consequences of lowering the standard of nitrate in drinking water from 50 mg/L to 9.25 mg/L and 3.87 mg/L, respectively are analyzed. The drinking water nitrate attributable number of cases was estimated using the risk in the exposed and unexposed population based on current nationwide exposure distributions. The analysis shows that a lower limit of 9.25 mg/L would decrease the annual number of colorectal cancer cases by 72 (95 % confidence interval: 34–114) and by an additional 55 (95 % CI: 10–100) for a stricter limit of 3.87 mg/L. The resulting avoided health-related costs are $179 million per year for the 9.25 mg/L nitrate limit and another $138 million per year for a further reduction to 3.87 mg/L nitrate. The new requirements would incur costs linked to either i) changes in land use management, ii) well reallocation or iii) use of treatment technologies. The additional costs are estimated to $0.03–1.84 per m³ abstracted water from public water companies, which together with costs for owners of private wells, will result in an average additional cost of $9 and $6 million per year for the two levels. The economic health benefits are higher than the costs for both limits with net gains of $170 million (9.25 mg/L) and additionally $132 million (3.87 mg/L) a year. Even in a worst-case scenario (lowest health-related benefits and highest mitigation costs), there is a likely economic gain for society from lowering the limit to 9.25 mg/L, but this might not be the case for the lower limit of 3.87 mg/L.