Photo interpretation and digital classification of IRS LISS -III sensor data have been carried out for a few villages affected by abnormal health problems in the Kasargod district of Kerala State. Physical location of the affected villages in relation to the agricultural lands use, watershed characteristics and the extent of cashewnut plantations are studied. It was found that the villages affected by the health problems are located in the microwatersheds that have steep slopes, nearly circular in shape, high runoff potential. The first order streams within these micro-watersheds are originating from the cashewnut plantations that are sprayed with a toxicant called Endosulfan. The study recommends to stop aerial spraying of any toxicant on the cash crops of these watersheds.