The deadly chemical cyanide and a quantity of sewage have leaked into a 30-mile stretch of the River Trent in Staffordshire.
Thousands of fish have died and people have been warned to stay away from the river while the incident is controlled.
The Environment Agency said pollution levels on the stretch between Stoke-on-Trent and Yoxall were starting to drop.
A spokeswoman said she could not give more information on where the cyanide had come from for legal reasons.
She warned the public, farmers, anglers, boaters and pets to stay away from the water as a precaution.
Severn Trent Water said the cyanide had been released by someone into the sewers upstream from the company's Strongford sewage treatment works in Stoke.
That had caused problems at the works, which meant partially-treated sewage was also released into the river.
Simon Cocks, waste water services director, said Severn Trent was not linked in any way to the chemical but said it was working with the Environment Agency to find out what had happened.
A spokeswoman said the company did not get its water from the Trent and the water supply had not been affected "at all".
Alan Walters, from the Environment Agency, told BBC News the incident had had "a huge impact".
However, the agency said it had not received any reports of humans or pets being affected by the contaminated water.
Officers from the agency spent the night pumping oxygen into the river to offset the worst effects of the spillage.
The Environment Agency said the pollution was expected to reach Burton-upon-Trent by late afternoon.
A spokeswoman said that officials were tracking the pollution as it moved downstream and would keep taking water samples to monitor the situation.
A spokeswoman for the RSPCA urged members of the public not to go near any animals in distress but instead to report any sightings to the charity.
She said: "For those people with livestock we would remind them to get them away from the area as safely as possible."