That designation was elevated from the drought watch that has already been in effect since October.
The warning allows the New Jersey Department of Environmental Protection to manage water resources.
"Please take this seriously," said New Jersey Gov. Phil Murphy while declaring the warning. "We have a very dry winter ahead of us."
On Thursday, Trenton Water Works issued a mandatory water conservation notice to the drought warning.
Trenton Water Works issues mandatory water conservation notice
It asks all customers and residents within the water system's service area to limit all non-essential water usage. That includes pausing watering outdoor plants and washing your car at a commercial car wash.
Since early October, the New Jersey Forest Fire Service has responded to 537 fires, that is 500 more fires than during the same period last year.
The governor says it's now up to people around the state to do their part to reduce the risk of additional wildfires by not lighting outdoor fires and conserving water.
Dry conditions in the Garden State are a growing concern, not only for firefighting efforts but for the continued availability of drinking water.
New Jersey officials asked for additional voluntary water conservation measures, saying they want to avoid imposing mandatory water restrictions.
Two major reservoirs in the state were at 51% and 45% of capacity on Wednesday, enough to keep the taps flowing, but low enough to cause concern for what might happen with additional weeks or months of low rainfall.
One river that is a supplemental source of drinking water was at 14% of normal.
"The warning enables the DEP to order changes to passing flows and streams, to reservoir releases, and other actions by water utilities to preserve and balance supplies," said NJ DEP Commissioner Shawn LaTourette.
Murphy asked people to take shorter showers, only run the dishwasher when it is full, and turn off the water while brushing their teeth.
September and October were the driest two-month period ever recorded in New Jersey. Since August, the state has received 2 inches (5 cm) of rain when it should have gotten a foot (0.3 meters).
No significant rainfall was in the foreseeable forecast, officials said.
Because of the drought warning, NJ American Water issued a mandatory conservation notice for customers across the state.
Deadly wildfire at border of New Jersey and New York grows to 5,000 acres
The ground is also bone-dry, said Greg McLaughlin, an administrator with the New Jersey Forest Fire Service. This makes wildfires even more dangerous in that they can burn downward through dry soil and root systems, and endure for months.
On a ground dryness scale in which 800 is the highest possible score, New Jersey is at 748, meaning that the soil is dry almost 8 inches (20 centimeters) below the surface. That level had never before been reached, McLaughlin said.
A wildfire that broke out July 4 in New Jersey's Wharton State Forest by someone using illegal fireworks has long been considered contained. But it has been smoldering underground for four months and could reignite above ground, McLaughlin said.
"We have to monitor these fires for weeks or months," he said.
Wildfire in Wharton State Forest was sparked by fireworks, officials say
Several leaders of public water systems urged New Jersey to go straight to a drought emergency, the Associated Press reported. Tim Eustace, executive director of the North Jersey District Water Supply Commission, said the Wanaque Reservoir is at about 45% of capacity.
"Using drinking water to water lawns is kind of crazy," he said. "I would really like to move to a drought emergency so we can stop people from watering their lawns."
New Jersey has been battling numerous wildfires in recent weeks, including at least five last week. The largest has burned nearly 5 1/2 square miles (14.24 square kilometers) on the New Jersey-New York border and led to the death of a New York parks worker. That fire was 20% contained as of Tuesday morning.
Jeff Tober, manager of Rancocas Creek Farm in the bone-dry New Jersey Pinelands, said his farm has gotten 0.6 inches (1.52 cm) of rain in the last 87 days.
"It's been pretty brutal," he said.
Water Conservation Tips
- Limit yourself to just 5 minute showers
- Shut off faucets when brushing your teeth
- Run your dishwasher and laundry only when full
- Let lawn go dormant for winter months
- Fix leaks, winterize home
The Associated Press contributed to this report.