Yorkshire Water said if metaldehyde - an active ingredient in slug pellets - enters the water system it can lead to breaches in EU standards.
It has asked farmers to ensure pellets are applied correctly or consider alternative measures on land near the River Derwent and Ouse.
Metaldehyde poses no danger to health or the environment, the company said.
Areas where the compound has leaked into the watercourses include land near Northallerton, Haxby, Stamford Bridge, Elvington, Loftsome and Pocklington.
Andrew Walker, from Yorkshire Water, said: "We are positively working with farmers on this issue as we recognise the demands they have to meet food production targets.
"So we are not saying to farmers to stop using slug pellets, but instead to ensure they are applied correctly and to consider alternative measures that have a lower water impact.
"This way, crops will continue to be protected from nuisance slugs without adversely affecting raw water supplies."
Farmers are being urged to avoid polluting nearby watercourses when using slug control pesticides.