Raw sewage discharges into the environment have halved since the start of last year, according to the Environmental Protection Agency.
However, it said that many Uisce Éireann operated wastewater treatment plants are still being poorly managed.
In a report on urban wastewater treatment, the EPA says that urban wastewater discharges from 59% of Uisce Éireann's treatment plants failed to consistently prevent pollution.
Nearly half of these failures were caused by poor operational management and related issues.
Every day, more than a billion litres of wastewater, or sewage, is treated to make it clean and safe at over 1,000 Uisce Éireann treatment plants.
It is then discharged into rivers, estuaries, lakes and coastal waters around the country.
If that is not done properly it causes pollution and poses a significant health risk from harmful bacteria and viruses that can make people sick.
Excess nutrients such as nitrogen and phosphorus in wastewater discharges pollute water bodies, deplete oxygen levels, and damage aquatic ecosystems.
The EPA acknowledges in its report that investment by Uisce Éireann delivered significant progress last year.
For instance, it cites the elimination of raw sewage directly into the environment from 25,000 people in Arklow, Co Wicklow; Kilrush, Co Clare; Omeath, Co Louth and Coolatee, Co Donegal after new wastewater treatment plants were completed in those towns.
Despite this progress, however, it says that wastewater discharges are continuing to harm water quality in rivers, estuaries, lakes and coastal waters.
Untreated sewage from around 20,000 people in 15 other towns and villages is still being discharged into the environment every day because the sewers serving these areas are not yet connected to treatment plants.
The report highlights that discharges from over half of licensed treatment plants are failing to consistently meet the required standards.
Failures range from occasional, short-term breaches to persistent discharges of poorly treated sewage.
The main causes are inadequate infrastructure and poor operation and maintenance of treatment plants.
The EPA has said that addressing infrastructural deficits is a longer-term challenge that requires substantial and sustained investment.
However, it warned that operation and maintenance issues that are the cause of almost half of the failures can and must be resolved as a matter of urgency.
These include equipment breakdowns and inadequate operational procedures and training.
The report says that there were 1,080 short duration or once-off incidents at wastewater treatment plants last year.
Over half of these were attributed to equipment breakdowns and issues with the operation and maintenance of plants.
Other common causes included blocked and broken sewers and problems at pumping stations.
The EPA says that addressing such issues does not require major investment and so they should be addressed in a much shorter timeframe.
EPA Programme Manager, Noel Byrne, said: "Too many wastewater treatment plants are failing to meet licence standards due to poor management and maintenance practices. This is simply not good enough.
"When treatment plants break down or are not managed properly, our environment pays the price.
"The EPA has prosecuted Uisce Éireann on 28 occasions for failing to treat wastewater properly. Poor operational performance will not be tolerated by the EPA.
"Uisce Éireann must take immediate action to improve the operation and management of treatment plants and implement effective maintenance programmes to prevent equipment breakdowns."
The EPA says ongoing delays by Uisce Éireann in delivering improved infrastructure are prolonging risks to water quality.
It has identified 78 priority areas for improvements but says that Uisce Éireann has not yet started the works needed at half of these.
Responding to the report, Uisce Éireann said it remains committed to addressing the areas where continued improvements are needed through unprecedented a multi-billion-euro capital investment programme - the largest of its kind in the State's history.
It said many of the challenges stem from the legacy condition of its assets, which in many cases lack the resilience required of a modern wastewater network.
This is primarily due to decades of under-investment and the ageing nature of much of Ireland's wastewater infrastructure which comprises over 1,000 treatment plants, 2,200 pumping stations, and 26,000km of network.
To address this, Uisce Éireann has implemented new organisational structures designed to strengthen operational oversight, improve incident response and enhance long-term resilience.
It says these changes ensure that it is better equipped to manage risks, respond to incidents, and deliver the high standards of service and environmental protection expected by the public and its regulators.
Maria O'Dwyer, Uisce Éireann's Director of Infrastructure Delivery, said: "We know what needs to be done and have an ambitious plan in place to achieve it.
"Securing the necessary statutory consents for our projects has been a significant challenge, and we have encountered legal obstacles in several locations.
"For example, the Greater Dublin Drainage Project, which is critical to meeting the rapidly growing wastewater needs of the Greater Dublin Area, has been stuck in the planning system for more than seven years and is currently subject to Judicial Review proceedings which risk delaying it further.
"Sustainable development cannot happen without appropriate water services infrastructure, and it is imperative that Uisce Éireann is given appropriate consideration in legislation at the plan, policy, and project levels to enable delivery of these essential projects," she said.
