The attack happened in Hengshishui in the booming southern province of Guangdong At least six people were injured, including two government officials.
More than 300 people in a southern Chinese town attacked a government building over the weekend in protest against a water diversion scheme, state news agency Xinhua said on Monday.
The Chinese government has become increasingly worried about rising public anger at environmental problems, especially pollution.
The latest attack happened in Hengshishui in the booming southern province of Guangdong, the report said. At least six people were injured, including two government officials.
"The villagers said they wanted the government to stop the ongoing construction of a reservoir that was planned to divert water from Hengshishui town to the neighbouring Qiaotou town," Xinhua said.
Xinhua said the reservoir is aimed at providing drinking water to more than 50,000 people, but people in Hengshishui feared it "would worsen the town's already dire water problem".
Xinhua said around 100 villagers took to the streets on Saturday, smashing cranes and vehicles with stones in an attempt to stop the reservoir's construction. Police detained six of them.
Calm returned on Monday, Xinhua said.
Last year there were protests at factories that were suspected of being the cause of lead poisoning of several hundred children in at least two Chinese provinces.
"Mass incidents" -- or riots and protests -- sparked by environmental problems have been rising at a rate of 30% per year, according to China's environmental protection minister.