The spill, believed to have been caused when a landslide ruptured a major oil pipeline, has contaminated a section of the Esmeraldas River in the province of the same name.
Residents in the town of Cube, where the water had changed color, were trying to stop the flow by building dikes, an AFP journalist saw.
"The mud formed by the oil has penetrated all the hillsides," said farmer Fernando Gandara.
The Emergency Operations Committee in the provincial capital, also called Esmeraldas, declared an environmental emergency over concerns about water quality.
Vilko Villacis, mayor of the city of more than 200,000, said the leak had caused "unprecedented" damages.
His office halted the diversion of river water to an aqueduct supplying the city and urged people to ration water.
On Friday, state-owned Petroecuador said it was working to address the emergency at the pipeline, part of the Trans-Ecuadorian Pipeline System (SOTE) which transports crude oil from the Amazon.
The company has not estimated the volume of oil spilled.
Ecuador last year produced 475,000 barrels of crude a day, exporting 72 percent of the total.
The SOTE is the most used pipeline system in the country, with the capacity to transport 360,000 barrels per day on the 500-kilometer (310-mile) journey from the Amazon to the Pacific coast.
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