South West Water says homes in the town as well as Dawlish and Holcombe could be without water this morning.
South West Water has been working all night to repair the problem near the junction of New Road, Dawlish Road and Teignmouth Road.
The company has apologized to customers in Holcombe village, the higher areas of Teignmouth and the John Nash / Teignmouth Road area of Dawlish who may be experiencing low pressure or no water this morning.
Temporary two-way traffic lights are in place on the main Teignmouth to Dawlish Road (A379) and drivers are advised to avoid this route if at all possible.