A British man fell into the water and disappeared after the float he was being towed on, flipped over.
The man has been missing since Monday afternoon at the vast Santa Clara reservoir in the Alentejo municipality of Ourique, to the north of Monchique.
A GNR source told the Lusa news service that the missing man is British, 29-years-old and was part of a group of ten people at the reservoir.
Six people were aboard a boat that was towing a banana-type float. The four people on the float fell into the water when the float flipped over and one of them is missing.
The alert was given at 4:54 pm and the Ourique and Odemira firefighters were mobilised.
The alert was given by people staying at a luxury private property with access to an inlet of the Santa Clara reservoir.
Those staying on the estate were British and all are said to be guests of the owner's son.
A team of Special Fire Brigade divers was sent by the Beja District Disaster Relief Operations Command.
Rescue operations at the Santa Clara reservoir have involved the GNR and the National Medical Emergency Institute, as well as the divers working from two boats.
The search stopped this evening at around 8pm and will resume at first light.