Cryptosporidium, a parasite known to cause large drinking and recreational water outbreaks, is tolerant of chlorine concentrations used for drinking water treatment. Human laboratory-based surveillance for enteric pathogens detected a cryptosporidiosis outbreak in Baker City, Oregon during July 2013 associated with municipal drinking water. Objectives of the investigation were to confirm the outbreak source and assess outbreak extent. The watershed was inspected and city water was tested for contamination. To determine the community attack rate, a standardized questionnaire was administered to randomly sampled households. Weighted attack rates and confidence intervals (CIs) were calculated. Water samples tested positive for Cryptosporidium species; a Cryptosporidium parvum subtype common in cattle was detected in human stool specimens. Cattle were observed grazing along watershed borders; cattle faeces were observed within watershed barriers. The city water treatment facility chlorinated, but did not filter, water. The community attack rate was 28·3% (95% CI 22·1–33·6), sickening an estimated 2780 persons. Watershed contamination by cattle probably caused this outbreak; water treatments effective against Cryptosporidium were not in place. This outbreak highlights vulnerability of drinking water systems to pathogen contamination and underscores the need for communities to invest in system improvements to maintain multiple barriers to drinking water contamination.