Anglers have spoken of their "devastation" after several miles of the Taf Fechan was polluted by a three tonne spill of aluminium sulphate.
Nearly 300 fish died from the spill which turned the water milky
The anglers said five years' of work creating a wild fishery for trout and minnows on the river were ruined.
The Environment Agency said the leak came from Welsh Water's Pontsticill treatment works near Merthyr Tydfil.
Welsh Water apologised and said it was working with the agency to minimise the impact.
The Environment Agency said the water had turned a "milky white" and so far nearly 300 fish had been killed with that number likely to "rise significantly over the next few days".
Agency team leader David Williams said: "We think some 5km (of the river) has been affected.
"I fear we could be looking at a very significant fish mortality, of maybe over 1,000 fish by the time we've finished work today.
"Our officers will be taking further samples today and undertaking a full environmental impact assessment to determine the full impact of the pollution incident."
A specialist biologist from the Environment Agency is also visiting the site.
Tim Masters, head of quality at Welsh Water, said the pollution came from a leak in a storage tank.
He said: "What we believe has happened is that a leak from a chemical tank has caused an overflow.
Dead fish are still being collected from the river
"The chemical concerned has gone into the overflow storage tank as it was meant to but it seems as though a secondary leak from that tank has caused the chemical to go into the river.
"We take this incident very seriously. We are very sorry for this, it shouldn't have happened and we will take all the steps necessary to put it right.
"It was a serious incident and we need to understand fully how it happened."
Meanwhile, the Merthyr Tydfil Angling Association said the pollution would also impact on other wildlife such as otters, herons and kingfishers.
The association's John Coombes said: "I feel devastated. The top 3km (1.86 miles) is a wild trap fishery.
"There has been a group of us up there creating small weirs and small pools to encourage fish to spawn. We have also created insect activity so the fish have more food."
He explained that the river had only just recovered from a pollution incident in 2001.
"We've worked so hard to improve the river and this year we were having best results for a long time," he said.
"People were coming from as far as Holland to fish the river. I can't see many fish surviving. It will take very long time to re-colonise it."