Gail Davies-Walsh, chief executive of Afonydd Cymru, said the country's waterways were already under strain due to pollution.
"The lack of rainfall and decline in river flows is really starting to exacerbate water quality," she said.
"We've already had a couple of rivers that have dried up and we're getting reports through of fish that have been killed because of a lack of water."
High river temperatures were also leading to concerns for the survival of aquatic life, she added, with water temperatures as high as 28C recorded in the Wye and Usk.
Davies-Walsh said she was worried that people's frustrations at water companies over sewage spills and leakages was making them less likely to heed advice about being careful with their use of water.
"I'm looking at social media comments and I totally understand those frustrations," she said.
"But we've really got to think about the fact that our water usage is directly impacting the flow in our rivers and directly impacting fish and other wildlife's survival.
"We really need to do our little bit to protect them."
In the horticulture and flower marquees of the Royal Welsh Agricultural Show in Llanelwedd, Powys, both farmers and growers were talking about the weather's impacts.
"People are going to have to adapt, think about gathering their own water," said Paul Thomas of the National Vegetable Society.
"In the spring when it was crazy rain, everything was delayed - sowing and planting -because it was just relentless, and then it was almost like an off-switch," added garden and food writer Stephanie Hafferty.
"One of the things I noticed this morning is the trees are going into autumn colour, and that's a big worry, it's not even August yet."
Elen Hughes of Trelawnyd, Flintshire, said the fields on her family's farm were "bone dry, nothing's growing".
"They've just last week had to feed the second silage cut to the cows because there's no food for the cattle."
"We've had really dry weather but also it's been really hot - and those things combined if you're a livestock farmer means excessive pressure on livestock," said Abi Reader, president of NFU Cymru.
"You have to make sure they have enough water and shade, and we are getting farms with springs and streams drying up," she told BBC Walescast.
"If you're an arable farmer the heat and dry weather have also forced a lot of the crops to come to ripening a lot earlier than they normally would.
"It's unprecedented early harvesting this year and farmers are going to see lower crop yields."
Welsh Water emphasised that NRW's drought declarations were different to its own announcements.
The company has already brought in a hospipe ban for 33,000 properties in west Wales.
"NRW's drought status reflects environmental conditions, including factors such as rainfall, river flows and groundwater levels," a spokesperson said.
"By contrast, Welsh Water's Temporary Use Ban is an operational measure based on local water demand and our ability to replenish service reservoirs with drinking water at the same rate, or faster, than customers are using water.
"It is driven by the capacity of the local treatment works and distribution network to keep up with sustained demand.
"This means different parts of Wales can experience different operational pressures, even if they are not in the same environmental drought category declared by NRW."
Cabinet Minister for Rural Resilience and Sustainability, Llyr Gruffydd, said: "This is an environmental drought classification. It's about the state of water levels in our rivers.
"It does not speak to public water supplies which I can assure people are there, there is sufficient supplies but we would of course urge people to be careful and diligent in their use of water so that that can be protected."
