In Iran and many countries, dams serve as primary sources of drinking water for large urban populations. Until 2022, more than 99% of Sanandaj’s drinking water was supplied by Qeshlaq Dam. However, over time, the water quality and taste declined, causing public dissatisfaction. This deterioration was largely due to inadequate watershed management, which led to eutrophication of the dam caused by agricultural runoff and discharge from human, livestock, and industrial sources. As a result, algal blooms and increases in certain aquatic and microbial populations occurred, forcing authorities to discontinue using Qeshlaq Dam for drinking water and switch to Azad Dam. The accumulation of organic matter and algal residues increased sediment sludge at the lake bottom, promoting decomposition processes, anaerobic conditions, and the release of harmful gases. The combination of nutrient enrichment, rising water temperatures, and sufficient sunlight created favorable conditions for algal growth and blooms, which are major contributors to unpleasant taste and odor in the water. Without effective management and control of nutrient inputs, toxic algal blooms, particularly cyanobacteria, may develop and release toxins that further degrade water quality. To understand the causes of taste and odor problems in Sanandaj’s drinking water, and to evaluate the algal composition and density in raw water entering the treatment plant, treated water, and the distribution network during summer 2022, planktonic sampling and analysis were performed. The findings showed the presence of algal blooms and variations in algal density over the sampling period. Toxic cyanobacteria were detected in raw water and, at low levels, in treated water. While the Sanandaj treatment plant was able to remove some algae, it could not completely eliminate them during bloom events, allowing small algae (mostly under 20 micrometers) to enter the distribution system at low concentrations. Compared to previous years, algal density in the lake had increased, with species such as Cyclotella sp., Diatoma sp., Oscillatoria sp., Dinobryon sp., Euglena sp., and Peridinium cinctum all known to produce taste and odor compounds. The Carlson Trophic State Index (TSI) and the nitrogen to phosphorus (N/P) ratio confirmed eutrophic conditions and severe nutrient enrichment, highlighting the urgent need for corrective actions and ecological restoration of the lake.