Disinfection of drinking water prevents waterborne diseases but can lead to the formation of trihalomethanes (THMs), which are linked to an increased risk of cancer. This study examined the association between water source allocation and THM levels in Israel. A retrospective analysis of water quality reports, published by the Israeli Ministry of Health, was conducted, including only samples collected from the water distribution system between 2015 and 2024. To assess temporal and geographic variability, monthly and annual averages were calculated. Trends were evaluated using interrupted time series regression. Overall, 16,268 samples were included, with a study-wide mean THM level of 30.41 µg/L, mainly due to Bromoform. Elevated THM levels were observed in northern districts, particularly before 2020, with seasonal peaks in the summer months. After 2020, as surface water utilization increased, THM levels also rose in central Israel, with no discernible seasonal pattern. Southern regions, supplied mainly by desalinated water, showed consistently low levels. This analysis indicates that the water source influences THM formation, as increased surface-water use is associated with higher THM concentrations. Mixing surface and groundwater with desalinated water may reduce exposure in areas with high THM levels, highlighting the need for informed water management policies.