Sediments from 14 stations in the Foshan Waterway, a river crossing the industrial district of Guangdong Province, South China, were sampled and subsequently analyzed. The 14 stations were selected for the pollution discharging features of the river, such as the hydrology, the distribution of pollution sources, and the locations of wastewater outlets. The ecological risks were assessed, and the pollution sources were identified to provide valuable information for environmental impact assessment and pollution control. The spatial variability was high and the range were (in milligrams per kilogram dry weight): Pb, 46.0~382.8; Cu, 33.7~ 482.3; Zn, 62.2~1,568.7; Ni, 28.5~130.7; Cr, 34.7~1,656.1; Cd, 0.50~8.53; Hg, 0.02~8.27; and As, 5.77~66.09. The evaluation results of enrichment factor and potential ecological risk index indicate that the metal pollution in the surface and bottom sediments were severely polluted and could pose serious threat to the ecosystem in most stations. Although the hazard levels of the trace element differed among the stations, Hg was the most serious pollutant in all stations. The results of principal component analysis (PCA) show that the discharge of industrial wastewater is the most important polluting factor whereas domestic sewage, which contains a large amount of organic substances, accelerates metal deposition. And potential pollution sources were identified by the way of integrating the analysis results of PCA and data gained from the local government. Therefore, the conclusion is drawn that Foshan Waterway is seriously polluted with trace elements, both in the surface sediment (0 to 20 cm) and the bottom sediments (21 to 50 cm) are contaminated.