Cavitational reactors are a novel and promising form of multiphase reactors, based on the principle of release of large magnitude of energy due to the violent collapse of the cavities. An overview of cavitational reactors in the specific area of water disinfection, in terms of the basic mechanism, different reactor designs including recommendations for optimum operating parameters and applicability of the cavitation phenomena for disinfection of different micro-organisms have been presented. A design of a pilot scale sonochemical reactor has been presented, which forms the basis for development of industrial scale reactors. Economic analysis for comparison of cavitation phenomena with other conventional techniques of disinfection has been discussed. It appears that though cavitation is quite successful in treatment of water at laboratory scale operations, comparatively higher cost of treatment as compared to the conventional chemical methods is a hindrance in its industrial scale application. Intensification of cavitational activity and efficient design of industrial scale hydrodynamic cavitation reactors is required for ensuring successful application of cavitational reactors at industrial scale operation.