Homeowners in Rossnowlagh are being urged to check their oil tanks for possible leaks.
Donegal County Council has confirmed that traces of what appears to be home heating oil have been detected seeping out from under the rock armour at the rear of the beach.
In a statement, the Council has described the situation as an issue of concern to both the community in Rossnowlagh and Donegal County Council.
The Council has conducted a number of investigations in the area and have also undertaken a leaflet drop in order to try and determine the source of the pollution.
However, as yet the source has not been identified.
Home and business owners in the area are urged to check their oil tanks for leaks.
If they suspect that they are losing oil or have filled their tank more often this year the Council is urging them to engage a plumber to pressure test the supply lines and check the oil tank.