The existence of taste and odour (T&O) in drinking water is one of the principal causes of consumer complaints and is commonly related to algae growth. Numerous studies have confirmed the existence of algal blooms emerging specifically in low-temperature periods, herein referred to as "cold algae"; these include chrysophytes, cryptophytes, dinoflagellates and diatoms. In addition, the adaption mechanisms of these "cold algae" involve high flexibility in their nutrient intake and to the hydrological characteristics of the waters and their high contents of intracellular polyunsaturated fatty acids (PUFAs). Like algae proliferating in higher temperature waters, cold algae can also produce offensive odours. The potential dominant T&O compounds of low-temperature algae probably include saturated/unsaturated aldehydes and even some terpenoids. Among these, the polyunsaturated aldehydes (PUAs), the derivatives of polyunsaturated fatty acids, are the dominant T&O compounds and are probably synthesized during cell rupture. It was found that, for cold algae, low temperature may have a favourable effect on the generation of algae-induced T&O compounds. Furthermore, to better understand the internal mechanisms of algal T&O production, the stress response theory is introduced, which provides ideas for T&O control in raw water and in water treatment. Finally, implications for T&O management are given based on this review.