The coast guard service has appealed for any information after a report that a small boat carrying two men capsized in Waterford Estuary.
It said reports the two young men went underwater close to Arthurstown are still unconfirmed, with no boats or local people believed to be missing.
“At this point we still have a report that persons could be missing,” said a spokesman for the Irish Coast Guard.
“So we have to err the side of caution.”
A full rescue operation was mounted shortly after 6am after a member of the public raised the alarm.
Dozens of coast guard and RNLI personnel, gardaí and a search and rescue helicopter have been involved throughout the morning.
The coast guard spokesman said the search will continue while gardaí investigate the initial report.
“It is a clam day and it’s calm in Waterford Estuary, but a small boat could capsize for a number of reasons,” he added.
The Irish Water Safety Association has also warned people taking part in Christmas swims to be careful of high tides and low temperatures.