US branches of the retailer Toys R Us have recalled 27,000 Chinese-made paint and crayon sets after the wooden box packaging was found to contain lead.
The crayon and paint set had been on sale since October last year.
The metal was also discovered in watercolour paint found within the set.
The move is the latest in a number of recalls involving toys made in China. Mattel urged parents to return over 18.5 million toys earlier this month.
That recall prompted a US senator to call for all toys imported into the country from China to be inspected.
Parents are being told to take the $20 crayon and paint set - on sale since October 2006 - away from children and return them to one of the firm's stores.
The US Consumer Product Safety Commission said that no injuries had been reported.
Last week, about 300,000 items were recalled by US retailers including SpongeBob SquarePants spiral address books. and diaries, Thomas the Tank Engine spinning tops and some toy buckets sold in the US.
China has not commented on the latest recall but it earlier pointed out that of the billions of goods it produces every year, only a fraction are found to be faulty.
Beijing was quick to act after the first Mattel recall, revoking the licence to manufacture goods at a firm in Guangdong province.
The Mattel recall included Chinese-made Sarge die-cast toys from the Pixar film Cars, as well as some toys including Polly Pocket, which contained small magnets that could come loose.