Actinomycetes are a complex group of bacteria present in a wide variety of environments, either as dormant spores or actively growing. Some actinomycetes produce two potent terpenoids (geosmin and 2-methylisoborneol (MIB)) and pyrazines, common causes of drinking water off flavours, and have been implicated in taste and odour episodes. However, isolation from a water source is not evidence that actinomycetes caused a taste and odour event. Dormant spores of actinomycetes may be isolated from aquatic environments in high concentrations, despite production in the terrestrial environment. Similarly, odourous compounds produced by actinomycetes may be produced terrestrially and washed into aquatic environments, with or without the actinomycetes that produced them. Actinomycetes may exist as actively growing mycelium in small, specialized habitats within an aquatic system, but their odourous compounds may influence a wider area. This paper attempts to elucidate the types and activities of actinomycetes that may be found in, or interact with, drinking water supplies.