Presently, there is a steady increase in the application of unlimited dose of chlorine to control vectors of Dengue, Malaria, Chickun-guinea etc., in village water sources. To analyse the toxic effects of chlorine on selected hematological parameters of the fish Mystus montanus a study was conducted for 45 days. Chlorine increased the concentration of WBC and decreased the concentration of RBC and Haemoglobin in a dose dependent manner. At high dose of 0.132mg Cl/L, the WBC was increased to 38.69 % and the RBC and Hb were decreased to 35.44 % &27.93% respectively from the control group of fishes. Haemolysis and vacuolated RBCs were observed in all the experimental group of fishes. Addition of thiosulphate, prolonged aeration and substitute for chlorine could be used to overcome the problems caused by chlorine.