The Grand River Conservation Authority and local Health Officials are advising people to take precautions in and around the Conestogo Lake reservoir south of Drayton.
Officials say Blue-Green Algae has been found in the water and it can pose a health risk to both people and animals if ingested, causing illness.
Warning signs are being posted around the reservoir, at the beach and at the gatehouse to the park.
Local cottagers are also being notified.
People should not swim in the water or drink the water, eat fish from the reservoir or make any contact with the algae.