Water quality campaigners have said they suspect a chemical spill after dead fish were reported in a stream.
Residents in Bransgore, Hampshire, reported blue-grey coloured water in Sopley Brook on Tuesday.
New Forest Water Watch, a volunteer group that carries out water testing, said it believed the pollution was chemical-related, rather than sewage or oil.
The Environment Agency confirmed it was investigating and said officers had taken samples for testing.
Water Watch co-ordinator Gill Hickman said, by the time she arrived at the stream on Tuesday morning, most of the blue colour in the river had gone.