Exhibit
10 (b)
               AMERICAN WATER WORKS COMPANY, INC.
            NON-QUALIFIED STOCK OPTION AGREEMENT



          THIS   NON-QUALIFIED   STOCK  OPTION   AGREEMENT
(the "Agreement")  is made as of May 4, 2000, between
American  Water Works  Company, Inc., a Delaware corporation
(the "Company")  and (the  "Employee")  pursuant to the
terms and  conditions  of  the American Water Works Company,
Inc. 2000 Stock Award and Incentive Plan  (the  "Plan").
Capitalized  terms  not  defined  in  this Agreement shall
have the meanings set forth in the Plan.

          THE PARTIES AGREE AS FOLLOWS:

          1.    Award  of  Options.  Pursuant to  the  Plan,
the
Company  hereby  awards to Employee options  (the
"Options")  to acquire shares
of Company common stock (the  "Stock")
at the exercise price of $22.56 per share (the "Exercise
Price"), subject  to the terms and conditions set forth in
this  Agreement and the Plan.  A copy of the Plan has been
delivered to Employee. By  signing  below,  Employee agrees
to  be  bound  by  all  the provisions of the Plan.  The
Options granted hereunder  are  nonqualified stock options.

          2.    Vesting Schedule.  Subject to Sections 6
and  7
hereof,  the Options shall vest and become exercisable  in
three equal  installments  on  each of the  first,  second,
and  third anniversaries of May 4, 2000.

          3.    Expiration  Date.  Unless terminated
earlier  in
accordance with this Agreement or the provisions of the
Plan, the Options  subject to this Agreement shall expire on
May  4,  2010 (the "Expiration Date").

          4.    Payment of Exercise Price.  The Exercise
Price of
the  shares as to which Options are exercised may be paid to
the Company  at the time of exercise in cash or in Stock or
in  such other  consideration or such combination thereof as
the Committee shall  permit at the time of exercise, in each
case (a)  pursuant to  rules                             and
procedures established by the Committee  and  (b)
having  a  total Fair Market Value determined as of the
date  of
exercise equal to the Exercise Price.

          5.     Non-transferability.   Except  to   the
extent
otherwise  determined by the Committee, Options granted
hereunder
shall  not be assignable or otherwise transferable other
than  by will  or  the laws of descent and distribution.
Unless otherwise provided  by  the Committee, during the
lifetime of Employee  the Options  shall be exercisable and
elections with respect  to  the Options  may  be made only
by Employee or Employee's guardian  or legal representative.

          6.   Termination of Employment.

               (a)   Except to the extent provided in
     Section  7 hereof  or  any employment agreement or
     severance  agreement between  Employee  and the
     Company, the provisions  of  this Section  6 shall
     apply to the Options upon a termination  of Employee's
     employment  with  the  Company  and   all     its
     subsidiaries ("Termination") for any reason.

               (b)    In   the  event  of  Employee's
voluntary
     Termination  (other than  "Retirement",  as  defined)
     or  a Termination  of  Employee  by  the  Company  for
     Cause  (as defined), all vested and unvested Options
     shall be  canceled on the Termination date.

               (c)   In  the  event of Employee's
Termination  by
     reason  of  death  or Disability (as defined),  all
     Options shall become immediately vested and shall be
     exercisable  in whole  or  in part at any time prior to
     the earlier  of  the Expiration  Date and the date one
     year after the Termination date.

               (d)   In  the  event of Employee's
Termination  by
     reason  of  Retirement, all Options shall become
     immediately vested  and shall be exercisable in whole
     or in part at  any time  prior  to the earlier of the
     Expiration Date  and  the date three years after the
     Termination date.

               (e)   In  the event of Employee's Termination
for
     any reason other than as provided in Section 6(b),
     6(c),  or 6(d), Options  which are unvested shall  be
     canceled  and
     Options which are vested and exercisable may be
     exercised in whole  or  in part at any time prior to
     the earlier  of  the Expiration  Date and the date 90
     days after the  Termination date.

          7.    Change in Control.       In the event of a
Change
in  Control,  any  Option  that was  not  previously  vested
and exercisable shall become fully vested and exercisable at
the time of  the Change in Control, subject to the
applicable restrictions set forth in the Plan.

          8.   Grant of Reload Options.

               (a)   Reload Options.  To the extent that (i)
the
     Exercise  Price  of  the Options or any Reload  Options
     (as defined)  related thereto is paid through  the
     delivery  of Mature  Shares  (as defined) in accordance
     with  Section  4 ("Payment  Shares") and/or (ii) Stock
     is paid or surrendered in   satisfaction  of  any
     withholding  taxes  incurred  in connection  with the
     exercise of the Option or  any  related Reload  Option
     ("Withholding Tax Shares"),  Employee  shall receive
     additional non-qualified stock options to purchase a
     number  of  shares of Stock equal to the sum of the
     Payment Shares  and  the Withholding Tax Shares
     ("Reload  Options"), provided  that (A) Employee is
     then employed by the  Company or  any  of its
     subsidiaries, and (B) at the time of payment of  the
     Exercise Price relating to such Options (or  Reload
     Options),  the  aggregate Fair Market  Value  of  the
     Stock purchased  pursuant  to the exercise  of  such
     Options  (or Reload Options) exceeds the aggregate
     Exercise Price of such Options  (or  Reload Options) by
     25% or more.  The  exercise price  per share of Reload
     Options shall be the Fair  Market Value  of  the  Stock
     on the date the  Reload  Options  are granted to
     Employee, and the Reload Options shall thereafter
     become  vested and exercisable at the earliest to
     occur  of (w)  one  year  after the grant date (if
     Employee  has  been continuously  employed  through
     such  date),  (x)  upon   a Termination   of  Employee
     due  to  death,  Disability                          or
     Retirement, (y) a Change in Control, or (z) 90 days
     prior to the  expiration  of  the  Maximum Term  (as
     defined). The
     "Maximum  Term" of any Reload Option shall be equal  to
     the remaining term of the Options to which it relates,
     measured from  the  date  upon  which the Option  was
     exercised  but
subject  to  the same post-employment termination provisions
of  the  Options described in Section 6.  Any Reload  Option
granted in connection with the exercise of  a Reload  Option
shall have a Maximum Term equal to the remaining term of the
Reload Option to which it relates, measured from the date on
which  the prior Reload Option was exercised but subject  to
the  same  post-employment  termination  provisions  of  the
Options described in Section 6.

          (b)    Penalties  for  Premature  Transfers.    If
Employee sells, transfers, assigns or otherwise disposes  of
more  than  50% of the number of Profit Shares (as  defined)
acquired  upon exercise of any Options (or Reload  Options),
during the one-year period following such exercise (or  such
lesser  period as corresponds with the shorter  of  (i)  the
remaining term of the Reload Options, or (ii) the vesting of
the  Reload  Options), the Committee may, in its discretion,
preclude  Employee from exercising any Reload  Options  then
held  by  Employee; provided, however, that  this  provision
shall not proscribe transfers by will or the laws of descent
and distribution; and provided further, however, that if any
shares subject to this Section 8(b) are delivered in payment
of  the exercise price of Options, in addition to the shares
of   Stock  otherwise  subject  to  this  Section  8(b),  an
equivalent  number of shares issued upon  exercise  of  such
Options shall remain subject to this Section 8(b).  Employee
agrees  that  any  action taken by the  Committee  hereunder
shall  not constitute any breach of any obligation  or  duty
owed  by  the  Company  to  Employee.   Notwithstanding  the
foregoing,   Employee may waive all rights  to  a  grant  of
Reload  Options by filing a written waiver with the  Company
within  ten days following the date of such grant, in  which
case  the restriction period described above shall not apply
with  respect  to any shares issued in connection  with  the
exercise  of an Option as to which Employee's Reload  Option
rights have been waived.

     9.   Definitions.  For purposes of this Agreement:
          (a)   "Cause" shall have the meaning given to such
term  in  any  employment agreement or  severance  agreement
between  the Company and Employee in effect at the  date  of
Termination and, in the absence of any such agreement, shall
mean Employee's deliberate, willful or gross misconduct.

          (b)   "Disability"  shall mean that  Employee  has
become eligible to receive benefits under the Company's long
term disability plan or policy.

          (c)    "Mature  Shares"  shall  mean  any  of  the
following:  (i)  Stock  purchased by Employee  in  the  open
market, (ii) Stock acquired by Employee upon exercise of any
option  that has been held by Employee for no less than  six
months  after  the  exercise date, or (iii)  any  restricted
stock  of the Company  that is held by Employee for no  less
than  six  months after the vesting date of such  restricted
stock.

          (d)   "Profit  Shares" shall mean  the  number  of
shares  of  Stock acquired pursuant to the  exercise  of  an
Option (or Reload Option) having a Fair Market Value on  the
date  of exercise equal to the excess of the aggregate  Fair
Market  Value of the Stock purchased upon exercise  of  such
Option (or Reload Option) over the aggregate Exercise  Price
of such Option (or Reload Option).

               (e)     "Retirement"   shall    mean    Employee's
     Termination following the date on which Employee is eligible
     promptly   thereafter   to  commence  receiving   retirement
     benefits from the Company.
          10.   Withholding  Tax.  Employee  may  be  subject  to
withholding taxes as a result of the exercise or settlement of an
Option  or  other  payment in respect of an Option.   Unless  the
Committee permits otherwise, Employee shall pay to the Company in
cash,  promptly  when  the  amount  of  such  obligations  become
determinable,  all applicable federal, state, local  and  foreign
withholding  taxes that the Company in its discretion  determines
result  from  each such exercise, settlement or payment.   Unless
the  Committee otherwise determines and subject to such rules and
procedures as the Committee may establish, Employee may  make  an
election  to have shares of Stock withheld by the Company  or  to
tender  shares of Stock to the Company to pay the amount  of  tax
that  the Company in its discretion determines to be required  so
to be withheld by the Company upon exercise of an Option, subject
to  satisfying  any applicable requirements for  compliance  with
Section  16(b)  of  the Exchange Act.  Any  shares  of  Stock  so
withheld  or  tendered will be valued as of  the  date  they  are
withheld or tendered, provided that Stock shall be valued at Fair
Market  Value  on such date.  Unless otherwise permitted  by  the
Committee,  the  value of shares withheld  or  tendered  may  not
exceed the required federal, state, local and foreign withholding
tax obligations as computed by the Company.
          11.   Governing Law.  This Agreement shall be  governed
by  the laws of the State of Delaware, without regard to conflict
of law principles.



          IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written.

                              AMERICAN WATER WORKS COMPANY, INC.
                              By: ____________________________
                                   Name:
                                   Title:
                   Employee hereby accepts and agrees to be bound

by all the terms and conditions of this Agreement and the Plan.



                              _______________________________



Employee                    Title                        Options



J. James Barr               President and CEO            143,200
Ellen C. Wolf               Vice President and CFO        60,650
W. Timothy Pohl             General Counsel and Secretary 38,225
Joseph F. Hartnett, Jr.     Treasurer                     26,450
Robert D. Sievers           Comptroller                   26,450