Introduction An acute gastrointestinal illness outbreak was reported in a higher educational institution among students and faculties in East Sikkim, India, from January to February 2023. The investigation was conducted to identify the source of the infection and causative pathogens and prevent the spread of the outbreak. Methods We defined a case as three or more loose stools in 24 hours, abdominal pain, or vomiting with the onset of symptoms between January 16 and February 16, 2023. Active surveillance was conducted by reviewing the affected individuals at the campus and patient registers at the dispensary, where cases were treated. Stool samples, rectal swabs, water samples, and suspected food samples were collected for microbiological testing using conventional culture, multiplex polymerase chain reaction (PCR), and kit-based real-time PCR methods. Results Out of 1,850 residents, 106 (5.7%) were affected by gastrointestinal symptoms like diarrhea, vomiting, etc. The attack rate for females was 23 (1.24%) and for males was 83 (4.49%). The most affected individual median age was 21 years (range: 2-51 years). From the laboratory investigations, most of the cases demonstrated polymicrobial etiologies. Gastroenteritis pathogens like Campylobacter , astrovirus, and rotavirus diarrheagenic Escherichia coli (DEC) (EAEC, EIEC, ETEC, EPEC, and EAEC), Shigella , etc., were detected in the suspected samples. The environmental investigation indicated the presence of rusted and leaky water pipes and sewage pipelines, along with ineffective chlorination of the water plant. Conclusions Based on epidemiological and laboratory investigations, it is conjectured that sewage and fecal contamination of drinking water and poor maintenance of the water distribution system most likely caused the outbreak described in this study. Basic treatment modalities, adequate chlorination, and periodic inspection of the water system were suggested, which controlled the outbreak to a greater extent.