Mutant cane toads are being found in the industrial Queensland city of Gladstone, some with a leg growing from their chest, while others have been found with eight fingers instead of four.
Up to 20 per cent of cane toads in certain areas of the port city had malformations, compared to 1 per cent of toad populations in non-urban areas.
Gladstone is home to a coal-fired power station, two aluminium refineries and a developing liquefied natural gas industry.
Scott Wilson, of Central Queensland University, said between 6 per cent and 8 per cent of 10,000 cane toads examined throughout the Gladstone region in the past three years had been found with abnormalities. A council-run team, Gladstone Toadbusters, has caught the toads for environmental research.
High exposure to UV radiation and parasites, as well as chemical run-off and airborne pollution can contribute to amphibian abnormalities.
Dr Wilson said the city's heavy industry was not necessarily to blame for malformations in the toads, but water quality and health of fish in Gladstone Harbour had been the focus of environmental concern.
Temporary fishing bans were imposed after sick fish with skin lesions and cloudy eyes were found.
In 2011, 231 turtles and six dolphins were found dead in Gladstone.
Fishermen have blamed the water in the harbour for causing the problems, suggesting large-scale dredging projects had stirred up contaminants.
''There are a multitude of potential causes,'' Dr Wilson said. ''What might be happening at one site could be different to what's happening at another.''
''In fact, I did some preliminary work in Sydney with native frogs and found abnormalities in around 6 to 8 per cent of the population there.''
The mutations in Gladstone's cane toads could spell problems for native frogs in the region, too.
''Cane toads are to the fresh water environment, what canaries were to coal mines,'' Dr Wilson said. '' We've seen malformations constantly over the past three years, and we need to find out why.''