South West Water has urged residents across Brixham, Boohay, Kingswear, Roseland and north-east Paignton to boil their tap water.
Chris Rockey, from South West Water (SWW), said people should boil water to drink, cook and clean their teeth within the affected areas.
He said the firm would continue to work with “health professionals and monitor the water”.
SWW started its investigation after it was contacted by the UKHSA on Monday, he said.
SWW said it was confident boiled water was safe.
Mr Rockey said he was unable to provide a timeframe for how long residents should continue to boil water.
He said further advice would be issued when the water supply had “returned to normal”.