In a pressurized heavy water reactor (PHWR), the reactivity of the reactor and, consequently, the discharge burnup of the fuel depend on the isotopic purity of the heavy water used in the reactor. The optimal purity of heavy water used in PHWRs, in turn, depends on the cost of fabricated uranium fuel and on the incremental cost incurred in improving the heavy water purity. The physics and economics aspects of the desirability of increasing the heavy water purity in PHWRs in India were first examined in 1978. With the cost data available at that time, it was found that improving the heavy water purity from 99.80% to 99.95% was economically attractive. The same problem is reinvestigated with current cost data. Even now, there is sufficient incentive to improve the isotopic purity of heavy water used in PHWRs. Admittedly, the economic advantage that can be derived depends on the cost of the fabricated fuel. Nevertheless, irrespective of the economics, there is also a fairly substantial saving in natural uranium. That the increase in the heavy water purity is to be maintained only in the low-pressure moderator system, and not in the high-pressure coolant system, makes the option of achieving higher fuel burnup with higher heavy water purity feasible.