Improved sanitation is one of the core development indicators in the world. Households in sub-Saharan Africa lack improved sanitation. This study examined factors influencing rural households' willingness to pay (WTP) for improved sanitation (in terms of access to toilet and waste disposal) in Oyo State, Nigeria. Primary data was obtained from 268 rural households selected through a multi-stage sampling procedure. Descriptive statistics and Tobit regression analysis were used for data analysis. Results revealed that 92.5% of the respondents made use of unimproved toilet. The mean WTP per household per month for improved public toilet services was N658.80k. The factors that significantly influenced WTP for improved toilet services were respondents’ age (p<0.01), Gender (p<0.01), household size (p<0.01), income (p<0.05), distance to toilet (p<0.01) and use of covered latrine (p<0.05). The study inferred that respondents made use of unimproved sanitation sources. The study recommended that government and Non-Governmental Organisations (NGOs) should prioritize provision of improved sanitation services close to respondent’s locations at an affordable price.