Kerry County Council says this month's record rainfall is at least partly to blame for the slide, which occurred during construction work on a roadway to an electricity wind farm.
Large volumes of peat have so far travelled over 3km, sweeping away a bridge and preventing some residents from accessing their homes.
It is feared the peat could enter the River Smealeagh, an important spawning ground for salmon and sea trout.
A boil notice has been issued for people living in the immediate vicinity of the Lyres water treatment plant near Lyrecrompane.
