The company announced today it is one of seven across the south and east of England bringing in restrictions on water-use from April 5 - ahead of the Easter weekend.
The ban applies to the nine million water customers in the Thames Valley and London and follows one of the driest two-year periods on record.
Thames Water chief executive Martin Baggs said: "We have been doing as much as we can ourselves to save water, reducing leakage by a third since its peak in 2004 to its lowest-ever level, and hitting our leakage-reduction targets five years running.
"We know these restrictions will be unpopular, but they will save a lot of water. A garden sprinkler uses as much water in an hour as a family of four uses in a day, and when water is in short supply the needs of families must come first.
"We want to encourage everyone to continue to voluntarily save as much of this precious resource as possible, so there is enough to go around all our customers, however long it stays dry."
The region has had 35cm less rain than normal since March 2010, with the Pang - which is running at just a third of its long-term average flow and has dried up completely upstream of Bucklebury to its source seven miles north at Compton - one of worst hit rivers in Berkshire.
The restrictions include a ban on hosepipes being used for gardening, recreation uses - such as filling swimming or paddling pools - or cleaning purposes. Customers can still water their gardens and clean their cars, provided they use either a watering can or a bucket.
Mr Baggs added: "Anyone who willfully breaches the terms of the water-use bans can be prosecuted. And we will do that if necessary.
"But we would much prefer to get results asking for people's help, understanding and co-operation. The last time we had to restrict use, in 2006, we had a fantastic response from our customers, with a 5% reduction in water use on average."
He added the company can not rule out the possibility of applying for a drought order from the Government if the dry weather continues. Such an order would result in extended water use restrictions - most of which would affect commercial customers.
Met Office operations director Rob Varley said: "Even sustained rainfall over the next few months would have a limited impact, however we are working with the water industry to make sure they have the best weather forecast information available to help them manage their resources."
Enviroment Agency south east regional director, Howard Davidson, added: "We will be watching to ensure water companies follow their drought plans, and expect them to demonstrate they are doing everything possible to reduce water demand including stepping up their publicity campaigns.
The restrictions are being supported by the Angling Trust, RSPB and WWF UK.
Temporary Use Ban Notice: Section 76 Water Industry Act 1991
Thames Water Utilities Limited gives notice to all of its customers, that the water it supplies throughout its entire area must NOT be used for the following purposes:
1. Watering a 'garden' using a hosepipe;
2. Cleaning a private motor-vehicle using a hosepipe;
3. Watering plants on domestic or other non-commercial premises using a hosepipe;
4. Cleaning a private leisure boat using a hosepipe;
5. Filling or maintaining a domestic swimming or paddling pool;
6. Drawing water, using a hosepipe, for domestic recreational use;
7. Filling or maintaining a domestic pond using a hosepipe;
8. Filling or maintaining an ornamental fountain;
9. Cleaning walls, or windows, of domestic premises using a hosepipe;