A method and apparatus for providing sanitizing water in a cabinet (11) and spigot (26, 27) type bottled water dispenser (10) features an ozone generating system (50) to generate ozone for sanitizing the water. Ozone is generated and collected within an ozone generator housing (57). A blower (54) transmits air to the ozone generator housing (57). The air carries the ozone that is generated through a flow line (38) to an air diffuser (37) that is positioned upstream of the spigot (or spigots) (26, 27) used to dispense water. In one embodiment, a valve (101) that is activated on the spigot (26, 27) to dispense water also activates the blower (54) and ozone generator (50). In other embodiments, a flow sensor (145) activates the ozone generator (50) and blower (54). Various spigot (26, 27) and flow sensor (145) arrangements are disclosed as a part of the overall apparatus and method.