Kyle has three unique sources of drinking water for the city. The Edwards Aquifer is a groundwater source which was supplied Kyle for many years and is the smallest of the sources. Barton Springs is another groundwater source that supplys the northern part of the town and is the second largest part of the water supply. The Guadalupe -Blanco River Authority provides water from Canyon Lake, a surface water source that is treated at the San Marcos Water Treatment Plant, is piped along Interstate 35 to provide water as the main source to Kyle.

Drinking water is reasonably expected to contain at least small amounts of contaminants. Water responsible for drinking water comes from rivers, lakes, reservoirs, and wells as the risk of being up contaminants as it travels over the surface of land. In 2017, the City of Kyle assessed its drinking water (water report) and found no violation of allowed contaminates in its water sources. Even though no violations were found, radioactive contaminates such as combined Radium 226/228 was found in the water supply.