Blue-green algae has been found at Llangorse Lake near Brecon and Powys County Council is recommending that activities are restricted - especially where people are likely to be in the water.
The lake is popular for a variety of activities and water sports as well as camping.
The algae produce toxins which can cause skin rashes, nausea, vomiting, stomach pains, fever and headache if swallowed, the council warned.
Occasionally algae can cause more serious illness such as adverse effects on the liver and nervous system.
Blue-green algae occur naturally in inland waters, estuaries and seas and cannot be removed or treated. They thrive in warm conditions and are likely to come and go throughout the summer season.
People are advised not to swim or swallow the water, to avoid contact with the algae, not to eat fish caught in the lake and not to allow pets or livestock to come into contact with the water.
They should also abide by notices positioned around the lake.
Anyone who has come into contact with water containing blue-green algae should shower with fresh water immediately and those who become ill should seek medical attention.