Bottled water has been issued to dozens of residents in Killeavy, County Armagh, after the discovery of a disused pipe which contained residual diesel/petrol.
NI Water said it had carried out a flushing exercise to clear the system.
It said it would "continue to flush as long as necessary to resolve the problem".
"In the interim, a ‘Do not use tap water for drinking or cooking’ notice was issued to 43 homes," a NI Water statement said.
"Our number one priority is the quality and safety of drinking water and our policy is to err on the side of caution."
Sinn Féin councillor Liz Kimmins said a similar issue had arisen about three years ago in relation to water in the area.
"Water going into homes appears to be contaminated with a diesel type substance and there is a horrible smell off it."
‘Ground contamination’ NI Water confirmed the area was affected by a similar issue in 2015.
It said that as the "situation has reoccurred", further investigations have uncovered a disused pipe, approximately 18 inches in length, "which contained residual diesel/petrol".
"We are also arranging to have a section of water main and services replaced with barrier pipe work to avoid any future ground contamination impacting on the water supply," it added.