The incident in a village in Fujian province is the latest in a series of protests against environmental polluters to shake rural China.
According to the South China Morning Post about 200 villagers, some armed with iron bars, attacked three factories and a sewage plant in the province's leather development zone, smashing windows and equipment.
Police and local officials broke up the protest after several hours, but no arrests were made.
Local police station director Cheng Hongbin was quoted by the newspaper as saying the "serious nature" of the incident meant police could not take strong action.
"It was a massive incident and the villagers were angry. We couldn't take any action, nor detain anybody," he said.
Villagers had complained that discharges from the factories and sewage plant had polluted the water supply, damaged crops and created a lingering stench, the newspaper said.
Protests against polluting industries have become increasingly common across rural China, where emissions regulations are poorly enforced and the environment is often sacrificed in the pursuit of short-term profits.
The protest is also symptomatic of a growing sense of disaffection felt by millions of peasants across China who feel they have been left behind by the country's breakneck economic growth.