Residents from the village of Pennal in north Wales have been allowed to return to their homes following a breach in a reservoir dam.
It is thought that the breach may have been caused by a landslide.
North Wales police said the pressure on the dam had been reduced by a controlled release of water, and workers were continuing to reduce the water level.
It was estimated that about 100 households had been affected.
Some 80% of residents had left their homes, some of whom had gone to the local leisure centre.
North Wales Fire and Rescue Service said: "Over the course of the day, we've been able to undertake two releases of water from the reservoir.
"Subsequently, contractors and the landowner have created a permanent channel in the reservoir which is allowing the water to dissipate naturally and at a steady rate.
"Based on that information and survey from specialist pump operators on the scene, we were able to give the advice through North Wales Police that residents were able to return to their homes."
The service said it had been dealing with about six million gallons of water.
Earlier, superintendent Andy Jenks-Gilbert said an evacuation was carried out as a "precautionary measure".
In other parts of the country, about 1,000 people who had to abandon their homes and caravans when floods struck West Wales are starting to return to their homes.
They spent the night in refuge centres after a month's rain fell in 24 hours, in what Environment Agency Wales called an "unprecedented event".
Fire crews, coastguard lifeboats and military helicopters were all deployed when water swept through several caravan parks and villages. Around 150 people had to be rescued.
Tracey Office from North Herefordshire has been staying with her son in the family caravan at Llandre, five miles north of Aberystwyth, for half-term.
They left the site on Friday because she was worried about rising flood waters. She returned on Sunday morning to find the caravan completely destroyed.
"It's horrible," she said. "The water has been halfway up the caravan. It's a write-off. At least we were insured, but many of our friends weren't. They've lost everything."
The family has been coming to the site for three years.
"We loved it here," she said, "but I don't think we'll be coming back now."
Although the weather forecast is improving, a flood warning remains in place on the River Teifi at Lampeter and Llanybyther.
Main roads throughout Ceredigion are now open with care apart from the B4353 between Ynyslas and Tre'r Ddol which remains closed.
A section of the A487 north of Ceredigion remains closed at Derwenlas.
Mid and West Wales Fire and Rescue Service is warning people to stay away from flood water - and to avoid driving through it.
Several people are still having to be rescued or are getting into difficulties.
Three major bridges have been damaged and roads remain closed, so motorists are asked to avoid the Aberystwyth area if possible.