Kerry County Council is warning of a blue-green algae along the shore of Lough Leane that can be harmful to small animals.
Lough Leane is the largest of the three lakes of Killarney.
Signage has been erected to warn the public to keep dogs on leads and not to allow them to enter the water.
The warning follows the taking of samples by council staff in recent days, which laboratory tests confirmed the presence of the blue-green algae.
This may have the potential to form an algae scum, which can be harmful to small animals.
Kerry County Council says it is monitoring the situation closely, with daily inspections of the shoreline, and further water samples being taken as required.
The EPA, which also monitors the lakes of Killarney, said that while the quality of the lake itself is good, that of the Deenagh River is below par.