The Legionella bacteria were found during routine tests on the water at £21,000-a-year Canford School, in Wimborne, Dorset, on Friday.
The boys were off-sick with pneumonia symptoms - one is now back at school.
The other, treated in hospital, remains at home. Dorset and Somerset's health unit is awaiting the test results.
"It is not yet clear as to whether legionella did cause illness in these two children and we are awaiting test results"
The teaching block where traces of the bacteria were found has been closed.
Susan Bennett, consultant in communicable diseases at the Dorset and Somerset Health Protection Unit, confirmed the "more seriously ill boy had been in hospital but was now back at home recovering".
She added: "It is not yet clear as to whether legionella did cause illness in these two children and we are awaiting test results."
Dr Bennett said concerned parents had contacted her "seeking reassurance" that the school was safe to remain open.
She added: "I have reassured them that it is [safe to remain open] because it's not that unusual, that this does happen from time to time in institutional settings, in hospitals or prisons."
Dr Bennett explained the disease did not spread from person to person and it was found "very widely in the environment".
She said the unit plans to write to GPs of all pupils at the 577-strong school to put them "fully in the picture".
'Precautionary measure'
A spokeswoman at the Canford School said: "Following a routine monitoring inspection on 16 February, a sample was taken from the water system in one of the teaching blocks.
"It takes 10 to 12 days for the test to be completed. The school was informed on Friday, 3 March, that legionella bacteria were present in the sample.
"As a precautionary measure, the water supply to the areas affected was immediately closed. Water disinfection works were completed within 24 hours and this treatment kills all the bacteria."
The spokeswoman said that parents and staff were informed as soon as legionella was identified.
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