The Waikato Regional Council is sending out a warning about bright orange water in the Ohinemuri River.
It said the discolouration could be due to a mine shaft collapsing and the water should be treated as contaminated.
The incident was reported to the council at about 3pm.
Council staff are at the river and are assessing the discoloration.
Senior incident response officer Robert Isaac said staff had yet to identify the source of the discolouration, which appeared to enter the Ohinemuri River downstream of the Waitawheta River.
"Until we can ID the source we need to treat this as worst-case scenario as we are getting reports of people standing in the water.
"If this is an old mine shaft that has blown out than people should not be using or touching the water."
Other scenarios could include a collapsed forestry dam or other erosion.