However, infectious disease specialist Stephan Stenmark told the TT news agency on Tuesday that only five people have been confirmed as displaying symptoms related to the parasite.
Those infected with Cryptosporidium can suffer from diarrhea, upset stomach, mild fever, and vomiting. Symptoms can last for up to two weeks.
Skellefteå's roughly 30,000 residents have been advised to start boiling their drinking water, according to Stenmark.
Local authorities are expected to offer further guidance during a press conference later on Tuesday.
The largest of Skellefteå's waterworks is suspected of having been contaminated with the Cryptosporidium parasite, according to Stefan Johansson, head of the city's water and waste management division.
Johansson estimated that the suspected waterworks supplies drinking water to between 20 and 30 priority customers, including nursing homes and hospitals.
Results from tests performed on drinking water by the Swedish Institute for Communicable Disease Control (Smittskyddsinstitutet) are expected no later than Thursday, according to Stenmark.
Cryptosporidium is a parasite which lives in the intestines of humans, pets, livestock, and wild animals and can cause diarrhea, stomach pains, and fever.
In November 2010, it was found to have contaminated the drinking water in Östersund in Jämtland in northwestern Sweden. Around 13,000 people were sickened by the parasite and a UV filter has since been installed in the city's water treatment plant in order to help rid the city's water of Cryptosporidium.
A specific source for the Östersund contamination has yet to be found.
Cryptosporidium has since been detected in a number of lakes and streams, and in the drinking water of several towns, resulting in municipalities in Jämtland County to track the parasite and take measures to ensure their waterworks are functioning properly.
On February 18th, Östersund municipality announced that the city's water was once again drinkable.