In a study of 606 families in two urban squatter settlements in Madras, India, a family level Health Risk Index (HRI) was constructed combining seven socio-economic variables: caste; number of children under five years; number of literate adults; number of adult family members employed; source of drinking water; housing quality; and use of tobacco and alcohol. The Index was found to be a good predictor of illness in the family in the preceding three months, and of 0–60 year mortality in the preceding five years. The applications of the HRI have been demonstrated in the identification of high risk families for targeting health and social services, in the assessment of differentials in health care coverage and in the identification of appropriate intersectoral interventions aimed at improving the health status of disadvantaged families and communities.The use of the Health Risk Index in the study population resulted in the identification of 50 high risk families with HRI scores of 5 or more, indicating high risk status on 5 or more of the seven variables in the Index. There was a generally low level of coverage with primary health care services in this community, but it was higher among the 50 high risk families. An analysis of the options based on the health risks in this community indicate that an intersectoral approach combining health and nutrition inputs with efforts to improve housing, water and sanitation, would be required to achieve reductions in mortality and morbidity levels.