AHS says in a news release that visitors to the lake and residents on the shores should not drink from the lake or swim or wade in it.
About 10,000 people are at the lake for the pilgrimage, an annual event since 1889.
On Sunday, many of them were in the lake for a ritual blessing.
Site manager Tom Daniels says he hasn't heard of anyone feeling sick.
He says he doesn't think the advisory poses any problem.
"I went out and looked at it and I don't see any," he said Tuesday. "It's just an advisory. I think a lot of it's overblown."
The AHS advisory also recommends people not allow their pets or livestock to drink water from the lake, and says people may wish to limit their consumption of fish caught in the lake.
The advisory says blue-green algae produces a toxin that can cause serious illness to animals or humans who drink or have skin contact with infected water.
It says weather and wind conditions can cause algae blooms to move from one location in the lake to another, and the toxin can stay in the water even after algae have moved or disappeared.
People who come in contact with or ingest water containing toxic blue-green algae may experience skin irritation, rash, sore throat, sore red eyes, swollen lips, fever, nausea and vomiting and/or diarrhea.
Symptoms usually appear within one to three hours and resolve in one to two days. Symptoms in children are often more pronounced because they spend more time in the water and are more likely to accidentally ingest contaminated water.
People who consume contaminated water as a primary source for drinking water can develop more serious illnesses, such as liver damage, over time.
The pilgrimage ends Thursday.