Around 50% of Irish rivers and lakes are in high or good biological quality, according to an Environmental Protection Agency report.
However, the Water Quality Indicators Report for 2019 found that nutrient concentrations in waters are too high and that the trends are increasing.
The EPA said that the presence of too many nutrients, such as phosphorus and nitrogen, is the main threat to water quality.
The nutrients come primarily from agriculture and waste water, it said.
The EPA said over 20% of Ireland's groundwater, estuarine and coastal water have high nitrogen concentrations.
It also found nitrate concentrations are increasing in nearly half of Irish river and groundwater sites.
Concentrations of nitrate in drinking water can pose a risk to human health, particularly for young children.
The highest levels of nitrate were found in the south and southeast of the country, where the main source is agriculture.
Increasing phosphate levels were found in 25% of rivers.
The report found that just over 50% of rivers and lakes are in high or good biological quality.
Discussing the report, EPA Director Dr Micheál Lehane said: "Clean, healthy water is essential for our economy, our aquatic wildlife and for our health and well-being.
"However, this assessment shows that our water environment remains under considerable pressure from human activities. Of most concern is the continued upward trend of nitrate concentrations.
Dr Lehane added: "The problem is particularly evident in the south and southeast of the country where the main source is agriculture.
"We need urgent and effective action to ensure that the decline in water quality is halted and to restore those water bodies that have declined in quality."