A giardiasis outbreak from a chlorinated, unfiltered surface water supply in Penticton, British Columbia (pop. 25,000) from June to August 1986 resulted in 362 laboratory-confirmed cases. A telephone survey estimated an attack rate of over 12%. A reservoir pond containing Giardia-infected beaver was implicated as the source. A case-control study with 65 cases did not find any significant associations. A retrospective case-finding survey of records from eight (out of 35) general physicians estimated that 1,500 physician visits occurred and produced an epidemic curve in close parallel with that from laboratory-confirmed and reported cases. Despite improvements on the reservoir, another outbreak occurred when this water source was reinstituted in October for several weeks, confirming our conclusion that it was the source of the first outbreak. Various options for reducing the risk of future outbreaks are being explored including full water treatment.