The town of Huntsville received about 50 millimetres of rain in the last 24 hours and has declared a state of emergency.
The heavy rain has damaged infrastructure and there could be evacuations in low lying areas.
Nearby, the town of Bracebridge has declared a similar state of emergency.
Repair crews are responding to road flooding issues.
The Town has opened the Bracebridge Sportsplex for use as a temporary shelter, said a statement on the town's website.
"The Sportsplex will be open 24 hours per day until further notice. Anyone displaced because of the flooding and requiring temporary shelter can go to the Sportsplex as necessary," it said.
Residents throughout Muskoka are being reminded to stay clear of open water, creeks and rivers.