The Environment Agency says a new taskforce has led to a sharp increase in identifying illegal waste sites.
The taskforce tracked 400 new sites in just three months, bringing the total to 1,195 in England and Wales.
The government agency says the dumps pose risks to people and the environment, and that shutting them down is a top priority.
The waste sites tend to cluster around towns and cities as well as key motorway links.
The worst of them pollute homes and schools with smoke from illegally burned materials. More than 300 of the sites were within 50m of schools, homes or sensitive environmental sites.
The taskforce was set up after hundreds of individual "victims" of illegal dumping complained that the crime was not being taken seriously enough by the authorities. It includes former police detectives and has received around ?5m funding for the first two years.
The agency says increasingly people involved in waste crime are also involved in other criminal activities such as drugs and theft.
The agency brought more than 400 waste-related prosecutions during 2010/11. In the last six months it was granted court orders to recoup almost ?1m from offenders through the Proceeds of Crime Act.
In August 2011, a Berkshire man was given a two year community service order a month after being ordered to pay almost ?900,000 for running an illegal waste site which had a serious impact on local residents. People living near the site suffered serious disturbance at night from powerful floodlights and noise from barking dogs and car crushing operations.
In another example, the agency says it prosecuted a Leicestershire company for illegally burning waste and affecting local air quality.
Nearby residents' homes were affected by smoke. The defendant was fined over ?10,000.
The agency's chairman Lord Smith said: "The involvement of criminals in high-value waste crime is now a nationwide and worldwide challenge for enforcement agencies."
The news comes as the agency celebrates good news in another sector - serious pollution incidents from industry have fallen to their lowest level for over a decade, the Environment Agency announced today. New data also indicates that businesses are increasingly recognising that growth and responsible environmental practices go hand-in-hand.
More companies than ever are earning the highest "A" excellence rating for environmental performance, while the number receiving the lowest ratings continues to reduce.
The Environment Agency's Sustainable Business Report also reveals that industry is continuing to cut waste and emissions to air.
But there remain problem areas. Pollution incidents in the water and waste sectors, the largest permitted sectors, increased last year. Among contributing factors were an increase in the number of biowaste facilities in the waste industry which are new to regulation and increased self-reporting of incidents by water companies.
Lord Smith gave a veiled message to government ministers looking towards deregulation: "Achieving both economic growth and the protection of the natural environment is not always easy but can be achieved.
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