Stratford in central Taranaki has joined a region-wide fire ban and imposed water restrictions.
Taranaki has not been declared an official drought but Primary Industries Minister Nathan Guy says it is among dry areas being closely watched.
The New Plymouth and the Stratford district councils have banned sprinklers, irrigation systems and unattended hoses.
The New Plymouth council says river levels are falling with the high demand, and Okato's Mangatete Stream is reaching the limit of water that can be drawn off.
The high water demand is also causing dirty water to come out of some taps in Inglewood.