The relationship between high water iodine levels and thyroid dysfunction in the elderly remains poorly understood. This study aimed to elucidate how excessive iodine in drinking water affects iodine nutrition and thyroid function in the elderly population. This cross-sectional study was performed in the elderly in Yuncheng, Heze, Shandong. We identified a total of 385 patients with thyroid dysfunction and 385 propensity score-matched controls with euthyroid. Water, urinary, and blood samples were collected to detect the concentrations of iodine in water and urine, as well as thyroid hormones. The median (IQR) iodine concentrations in cooking water and drinking water for the total population were 294.99 (48.99, 478.14) µg/L and 172.87 (20.87, 462.13) µg/L, respectively. Among the elderly, median (IQR) urinary iodine concentration (UIC) was 394.20 (169.47, 764.41) µg/L, and 24-h urinary iodine concentration (24-h UIE) was 523.04 (277.84, 910.76) µg/day. Subjects with thyroid dysfunction reported higher intake of iodine from water (P < 0.001) and urinary iodine levels (P < 0.001) than controls. Logistic regression analysis showed thyroid dysfunction was associated with higher risks of elevated iodine concentrations in cooking water (OR 1.957, 95% CI 1.413-2.711), drinking water (OR 2.206, 95% CI 1.607-3.027), UIC (OR 3.612, 95% CI 2.494-5.230), and 24-h UIE (OR 2.568, 95% CI 1.784-3.698), indicating increased thyroid dysfunction risk among the elderly with high water iodine levels. Elevated iodine levels in water are associated with an increased risk of thyroid dysfunction among the elderly. Clinical trial registry number: Medical Ethics Committee of Tianjin Medical University; Trial registration number: NCT05716191, date of registration was December 08, 2023.