Freshwater fungi are key decomposers of organic material and play important roles in nutrient cycling, bio-remediation and ecosystem functioning. Although aquatic fungal communities respond to pollution, few studies have quantitatively assessed the effect of freshwater contamination on fungal diversity and composition; and knowledge is scarcer for tropical systems. Here we help fill this knowledge gap by studying a heavily-contaminated South American river spanning a biodiversity hotspot. We collected 30 water samples scattered across a quality gradient over two seasons and analyzed them using Terminal Restriction Fragment Length Polymorphisms (T-RFLP) coupled with 454 Pyrosequencing. Using T-RFLP we identified 451 and 442 Operational Taxonomy Units (OTUs) in the dry and rainy seasons respectively, whereas Pyrosequencing revealed 48,553 OTUs from which 11% were shared between seasons. Although 68% of all identified OTUs and 51% of all identified phyla remained unidentified, dominant fungal phyla included the Ascomycota, Basidiomycota, Chytridiomycota, Glomeromycota, Zygomycota and Neocallimastigomycota, while Calcarisporiella, Didymosphaeria, Mycosphaerella (Ascomycota) and Rhodotorula (Basidiomycota) were the most abundant genera. Fungal diversity was affected by pH and dissolved iron, while community composition was influenced by dissolved oxygen, pH, nitrate, biological oxygen demand, total aluminum, total organic carbon, total iron and seasonality. The presence of potentially pathogenic species was associated with high pH. Furthermore, geographic distance was positively associated with community dissimilarity, suggesting that local conditions allowed divergence among fungal communities. Overall, our findings raise potential concerns for human health and the functioning of tropical river ecosystems and they call for improved water sanitation systems.