The energy, waste and water company said the issue is being cause by maintenance work taking place on the water network.
Manx Utilities say that customers can get rid of their discoloured water by running their kitchen or downstairs tap until their water runs clear.
In a statement issued online, Manx Utilities said: ‘Large parts of Douglas are experiencing discoloured water at the present time due to maintenance work on the network.
‘We are asking Customers to run their kitchen/downstairs cold water tap until it clears. This may take some time and the more Customers who carry this out the quicker it will clear.
‘We apologise for any inconvenience.’