A system and method for extracting active elemental iodine from the contact of water with stored crystal iodine and for introducing the extracted elemental iodine into a water supply line and/or otherwise making the extracted elemental iodine available for an intended use. The system operates by allowing a portion of the water entering from a water supply line to be redirected to a first housing where it makes contact with stored crystal iodine causing to extract active elemental iodine. The iodinized water leaves the first housing and enters a second housing where it makes contact additional stored crystal iodine to help stabilize the elemental iodine concentration. The system can be designed to provide the elemental iodine in more than one potency concentration through the use of a metering valve and different travel routes for the elemental iodine out of the second housing.