Wollongong residents are being reminded to stick to the "three Ps" - pee, poo and paper - after a sewage overflow prompted warnings about fishing or swimming in a Dapto creek.

A resident alerted the Mercury to the problem, which was between the Dandaloo Hotel and the Dandaloo sports ground, after seeing signs warning people not to play, swim or drink the water from this tributary of Mullet Creek.

"I know kids are always fishing and swimming in Mullet Creek," the resident said.

"What I would like to know is how is there a sewage overflow."

The woman said one of the horses, which was agisted on land near the creek, had fallen sick in recent days.

Sydney Water confirmed there had been a sewage overflow, saying it had been caused by a buildup of disposable wipes which had bene flushed down the toilet by residents upstream.

"Sydney Water was made aware of a wastewater overflow in Dapto on 29 December," a spokeswoman said.

"A crew attended the same day to fix the fault and stop the overflow.

"The overflow occurred because of wipes in the pipes.

"The wastewater overflow entered bushland and an unnamed creek."

The stream where the signs had been erected flows into the major waterway of Mullet Creek, which itself flows into Lake Illawarra.

People were warned again to avoid the creek until test results gave it the all-clear.

"Signage has been erected and we encourage people to avoid the area until the clean-up is complete and lab results indicate the site is all clear," the water utility's spokeswoman said.

"Sydney Water takes its responsibility to protect public health and the environment seriously. We take this opportunity to remind customers to only flush the three Ps: poo, pee and paper."

The spokeswoman said the precise source of the wipes could not be determined.

"Unfortunately, it is too difficult to say with any certainty where the wipes came from, which is why we really just want to get the message out whenever possible that wipes don't belong in the pipes," she said.

People can report faults to Sydney Water on 132090.