South West Water is under investigation over its treatment of sewage, the Water Services Regulation Authority has announced.
It joins five other water companies in England and Wales being probed over wastewater concerns.
Raw sewage was discharged into waterways 375,000 times last year, according to the Environment Agency.
It poses a serious risk to health and the environment.
South West Water cover Devon, Cornwall and small parts of Dorset and Somerset, areas of England that are popular with swimmers and surfers.
Investigations are ongoing into Anglian Water, Northumbrian Water, Thames Water, Wessex Water and Yorkshire Water.
It has become common in England and Wales for members of the public to report seeing raw sewage in rivers, canals and along the coasts.
Condoms, toilet paper, and even excrement can be seen in the water and on riverbanks or beaches.
“As we gather and analyse more information, including data on storm overflow spills, our concerns have grown further about South West Water’s operation of its wastewater assets and environmental performance,” said David Black, Ofwat Chief Executive.
He called the scale of the issue so far “shocking” and told BBC News that Ofwat had never taken action on this scale before.
The charity Rivers Trust told BBC News that the decision to open the investigation was “long overdue” and that “this kind of practice has become business as usual in the water sector.”
In January, MPs were warned that a “chemical cocktail” is running through all of England’s rivers.
Ofwat has the power to fine water companies 10% of their annual income.