The bacteria - which when inhaled is the most common cause of Legionnaires' disease - was recently found in samples taken at Donisthorpe Hall on Shadwell Lane but managers say there is no risk to residents.
Legionnaires' disease is a type of pneumonia usually caused by breathing in mist from water that contains legionella.
Donisthorpe Hall is a nursing home that is currently classed as requiring improvement, following an August 2018 inspection by the Care Quality Commission (CQC) health watchdog.
Managers say they have reassured residents and their families that there is no risk to residents or visitors following a health and safety check on its water system.
Sue Cawthray, a trustee for the home, said: "During these checks, the bacteria legionella was found in some of the water samples.
"The management team took immediate expert advice from the council and
Infection Control experts, and all necessary steps have been taken both to address the weaknesses in the water heating systems and to keep residents safe while this is happening."
Donisthorpe Hall provides accommodation and nursing for up to 189 people in one adapted building, according to the most recent CQC report.
In a statement released by the care home, they said open meetings have been held with residents, relatives and the wider community together with representatives of the contractors, the Trustees and Leeds City Council contracts team to enable them to ask questions about the situation.
The Registered Home Manager, Jane Stone, reassured residents and relatives.
She said: “All precautions have been taken, we have a robust plan in place, which has been extremely effective the water system is being chemically treated and samples regularly taken in line with our action plan and risk assessment and all boiler temperatures have been adjusted.
"Since the onset of this situation, I have been in communication with the Care Quality Commission, Leeds City Council, Leeds Clinical Commissioning Group, Public Health England, Infection Prevention and control lead nurse.
"All test results are showing the disinfection is working and that the bacteria is clearing from the system.
"We are open and transparent with all our test results, which we share with all statutory bodies."
Ms Stone confirmed no-one has presented any symptoms of the disease at the home and management are "constantly monitoring" residents.
She added: "I would like to pay tribute to the staff and contractors who have been working many extra hours to keep things running smoothly with the least possible disruption to the home in order to manage these issues and to thank residents and relatives for their ongoing support.”