The pipeline serves a high-pressure room in the northern suburb of Taji.
The attack, which happened on Sunday, affected distribution from the Karkh processing plant that serves northern and western Baghdad, said Amir Ali Hasson, a spokesman for the Baghdad mayor's office. More than 30 districts of the capital have been affected.
"There is a real water shortage problem in Baghdad," Hasson said.
Crews were working around-the-clock and Hasson said the repairs would be completed by late on Tuesday.
Fighters have frequently hit infrastructure around the country in a bid to destabilise the government.
Baghdad, a city of about five million, has more than 160 billion litres of potable water in reservoirs, the US military said.