Wessex Water issued the notice to 250 homes in Bratton Seymour, Shepton Montague, Yarlington, and Maperton on Tuesday after tests found the water "was not of its usual standard".
The problem was traced back to a reservoir which has now been "drained, cleaned, and refilled", the firm said.
Tests held earlier now show the water quality is "excellent".
Nigel Martin, water supply general manager, said: "We have carried out extensive tests and they all show the quality of the water is excellent and there is now no need to boil it."
He added that all customers would receive compensation in due course for the inconvenience caused.
Wessex Water added that at no point was the parasite cryptosporidium - which affected thousands of homes in the Lancashire area last month - found in water samples.
A warning made to hundreds of homes in south Somerset to boil their tap water has been lifted after four days.