Eukaryotic microorganisms are naturally present in many water resources and can enter, grow and colonize water treatment and transport systems, including reservoirs, pipes and premise plumbing. In this study, we explored the eukaryotic microbial community structure in water during the (i) production of drinking water in a seawater desalination plant and (ii) transport of the drinking water in the distribution network. The desalination plant treatment involved pre-treatment (e.g. spruce filters), reverse osmosis (RO) membrane filtration and post-treatment steps (e.g. remineralization). 454 pyrosequencing analysis of the 18S rRNA gene revealed a highly diverse (35 phyla) and spatially variable eukaryotic community during water treatment and distribution. The desalination plant feed water contained a typical marine picoeukaryotic community dominated by Stramenopiles, Alveolates and Porifera. In the desalination plant Ascomycota was the most dominant phylum (15.5% relative abundance), followed by Alveolata (11.9%), unclassified fungi clade (10.9%) and Porifera (10.7%). In the drinking water distribution network, an uncultured fungi phylum was the major group (44.0%), followed by Chordata (17.0%), Ascomycota (11.0%) and Arthropoda (8.0%). Fungi constituted 40% of the total eukaryotic community in the treatment plant and the distribution network and their taxonomic composition was dominated by an uncultured fungi clade (55%). Comparing the plant effluent to the network samples, 84 OTUs (2.1%) formed the core eukaryotic community while 35 (8.4%) and 299 (71.5%) constituted unique OTUs in the produced water at the plant and combined tap water samples from the network, respectively. RO membrane filtration treatment significantly changed the water eukaryotic community composition and structure, highlighting the fact that (i) RO produced water is not sterile and (ii) the microbial community in the final tap water is influenced by the downstream distribution system. The study results raise questions concerning the source of the major eukaryotic community in the network and the emergence of fungi as a dominant group in the drinking water distribution system suggests that these microorganisms need special attention.