Diablo 1 Walkthrough -> Poisoned Well
Location: Level 2, Dungeons, Dark Corridor.
Given by: Healer Pepin.
Once you've reached level 1 of the dungeons, head up to town and approach Pepin the Healer; he'll likely give you this quest. Pepin will tell you that Tristram's residents have recently become ill, and the source of the water is the cause. The healer believes the water source may be poisoned and asks you to cleanse it before it's too late for the townspeople.
On the second level of the dungeons is the Dark Corridor—a rectangular structure surrounded by candles and chandeliers, with a rift in the middle. This rift leads to the spring. To complete the healer's quest, you'll need to kill all the monsters inhabiting the poisoned spring. It's inhabited by various types of fallen creatures and goatmen, both melee and archers.
Once you kill the last monster, the yellow color of the water in the spring will change to bright blue, meaning the quest is complete.
Reward: Pepin will give you the Ring of Truth , which will be your best ring at first.
Source: diabloarea.net (author: Kitty Venom)
See also:

