The WHO said 5,000 cases of Acute Watery Diarrhoea (AWD) have already been reported this year compared to 2,000 in the Red Sea port in 2010.
Poor hygiene and sanitation along with recent rainfall in some areas had led to the contamination of already limited and unsafe water supplies, according to the UN health agency, which said the drought in the Horn of Africa had exacerbated the situation.
"The effects of the recurring drought on several parts of Djibouti and neighbouring countries have resulted in a malnourished, poorer and more vulnerable population," a WHO statement said.
The body is working with the Djibouti ministry of health to train health workers and set up treatment centres.
Last week the UN rights agency reported an outbreak of cholera among Somali refugees in Kenya's huge Dadaab refugee camp, with one death.
The WHO said on Tuesday that all five camps were affected by AWD but no cases had been reported in Kenya outside the camps.
AWD is rife in south central Somalia where more than 53,000 cases were reported this year, resulting in 795 deaths, the agency said.