Thirty tonnes of recycling was sent to landfill in September when five wagon loads were found to be contaminated.
The equivalent of a year's worth of blue box waste from 100 homes was found to contain items such as paint, used nappies and food waste.
As a result, Redcar and Cleveland Council said, the waste could not be sorted "without putting staff at risk or damaging equipment".
It is now working to raise awareness of what can and cannot be recycled.
One of the five wagon loads was contaminated with paint which spread through the recycling wagon and rendered all other items unsuitable for reuse.
The other four rejected loads were heavily tainted with plastic bags, nappies, clothing, and food waste, which led to infestations of flies and maggots.
Residents have been reminded not to put the following in their blue bins:
Clothes and textiles
Barry Hunt, cabinet member for neighbourhoods and housing, said: "The equivalent of an entire year of recycling efforts from 100 households has been lost in one month.
"One contaminated bin can impact an entire recycling collection, create significant additional costs, and affect the environment."
In July, the council was told it should be "ashamed" at the amount of recycling among its residents.
Councillor Philip Thomson told the authority the current rate of 38.1% of household waste being reused was "pathetic".