Water supplies in more than 60 locations around the country are under pressure as the warm weather and dry spell continues.
Irish Water is already having to impose night-time restrictions and other measures to keep taps running in 13 areas.
Another 50-60 areas are on a watch list as water levels are lower than needed to provide certainty of supply to the end of the forecast hot weather.
Around six are expected to require restrictions in the next few days and the rest may follow in the next fortnight.
Most of the affected areas are in the midlands and south-east but parts of the west and north-west, where large numbers of holidaymakers have driven up demand, are also causing concern.
Irish Water have announced night time water restrictions in Clonakilty - from 11pm to 7am.
It has also warned all of West Cork is under pressure.
Supplies to the cities are holding up well, but some large provincial towns are affected.
Wexford is already experiencing shortages and Mullingar’s main water source is also running low, although it is not considered at imminent risk.
Tom Cuddy, head of operations at Irish Water, said that the company’s water scarcity committee was monitoring levels in all water sources very closely.
“It’s very different across the country. The biggest challenge is in the south and midlands where rainfall has been 65-75pc of a normal year,” he said.
“That’s the issue on the supply side but demand is the other issue.
“When the weather gets hot there is a very noticeable spike in demand in outdoor use by domestic customers and in holiday resorts, seaside resorts and agricultural areas.
“So in the north-west, we’ve had pretty good rainfall but there are resorts in Donegal, Mayo and Galway where the capacity is being challenged because in some places the population doubles or even trebles in summer.”
The warning comes as latest reports from the Environmental Protection Agency show water flows in almost half of the country’s rivers either below normal or particularly low for the time of year.
A third of lakes also fell into those categories.
The vast majority of drinking water supplies comes from rivers and lakes.
While a smaller proportion comes from groundwater, these are most immediately at risk as 75pc of groundwater sources are below normal or are particularly low.
Levels are expected to fall further as Met Éireann warns of a heatwave as this week progresses, with forecasts of 25C and above over many parts from tomorrow.
No rain is forecast until next Monday at the earliest and even then it looks to be short-lived.
The long-term forecast to the end of this month is for above-average temperatures and below-average rainfall in most areas. The outlook for the first week in September is for continued warm weather and while the east looks likely to have some heavy rain, the west and south-west look to be unusually dry.
Mr Cuddy said there was every chance both the watch list and intervention list would grow over the coming weeks but he said the aim was to keep interventions as unobtrusive as possible.
Night-time restrictions, water-pressure adjustments, intensified leak repair programmes, tankering and switching between connected water schemes would all be used before day-time restrictions would be considered.
“Most of the time the customer doesn’t realise when there are interventions. They’ll still have water when they turn the tap on,” Mr Cuddy said.
However, he said the long-term issue of drier summers caused by climate change and growing demand because of population growth and economic expansion would continue to put the system under pressure.
“We have invested a lot in leakage reduction but what we save there is being gobbled up in new and additional use,” he said.
He asked people to be conscious of water conservation and in particular to avoid watering gardens as they would recover naturally when rain returned.