Army staff and civilians at Catterick Garrison in North Yorkshire have been warned to boil their water after a sickness bug was found in supplies.
Military personnel and civilians are advised to boil their water
Routine checks have found traces of the cryptosporidium parasite, which can cause vomiting and diarrhoea, a Ministry of Defence spokesman said.
The affected water is supplied by C2C Services, part of Severn Trent Water.
All personnel within the military area and 2,000 commercial and residential properties outside are affected.
Four schools in the Catterick area have also been closed because of concerns about the water supply.
Wavell Infants and Wavell Junior, Carnagill Primary and Le Cateau Primary schools were all closed on Tuesday.
Two schools - Risedale College and Hipswell Church of England primary - remain open.
An MoD spokesman said in a statement: "As a result of routine testing, traces of the parasite cryptosporidium, a tiny organism, have been detected in the water supply to Catterick Garrison.
"The water therefore does not meet required standards.
"Following discussions with the area health authority, the decision has been taken to issue a notice to all military and civilian residents and organisations within the affected area."
The MoD said it advised everyone within the affected area to boil all water used for drinking, cleaning teeth and food preparation.
Once boiled, the affected water was safe to drink, it added, but anyone with health concerns should contact their GP.
"Work is underway to restore the quality of the water supply," the statement added.
"Households and organisations within the affected area will be informed when this is complete."
Yorkshire Water, which also serves the Catterick area, said: "Yorkshire Water isn't involved in this issue and customers in the area who are supplied by us are unaffected.
"We'd like to reassure these customers that it is not necessary to boil their water."