Siskiyou County Public Health said the untreated wastewater was accidentally discharged into Cold Creek because of a sewer line break south of Hatchery Lane, west of Interstate 5.
Cold Creek flows into Lake Siskiyou.
The public is advised to avoid direct contact with water from Lake Siskiyou and Cold Creek until further notice.
Officials said the city of Mt. Shasta is making repairs to the sewer line, but there is no estimated time of completion.
The amount of sewage discharged is unknown at this time.