Hundreds of homes and businesses across Grimsargh, Longridge and Goosnargh are without water.
United Utilities says it is attempting to restore supplies.
Reports first surfaced around 10am on Sunday (1 February) of a loss of water pressure in and around the village of Grimsargh between Preston and Longridge.
The water supplier now says households are seeing a range of issues ranging from no supply, a loss of water pressure and also discoloured water coming through the taps.
Blog Preston understands the issue is focused on the White Bull water treatment works in Preston Road.
A statement from United Utilities says: “We have investigated a problem in your area and confirmed this is due to a fault at our water treatment works.
“Our team are on site and are doing everything they can to restore your water supply as quickly as possible.
“Water tankers will remain in your area to pump additional water into the network and help bring most supplies back to normal. We’re sorry for any inconvenience caused and thank you for your continued patience.”
No estimate is currently given for when water will be restored.
Households across a range of PR2, PR3 and PR5 postcode areas are being affected.
Anyone who is experiencing discoloured water is asked to check the United Utilities advice page about the issue.
