WHEN DuPont agreed to pay more than $100 million last fall to settle a lawsuit contending that its factory near Parkersburg , W. Va. , had fouled local supplies of drinking water, some investors hoped to close the book on pollution caused by an important ingredient used in processing Teflon.

But that was before a group of scientists advising the Environmental Protection Agency determined earlier this month that the ingredient, perfluorooctanoic acid, also known as PFOA or C8, was a "likely carcinogen," or cancer-causing agent. That finding could compel the E.P.A. to formally regulate the chemical.

It could also complicate DuPont's position in two matters: a criminal investigation into whether it hid tests showing a public health threat, and a class-action suit filed last week on behalf of people who bought Teflon-coated cookware.

There is no hard evidence that Teflon-coated cookware - or any other products that incorporate Teflon, from clothing to cleansers to fast-food packaging - poses the same threat as PFOA. For its part, DuPont has long maintained that there is no evidence that either Teflon or PFOA pose a serious threat.

Still, increased regulation or a successful class-action suit would be a heavy blow to one of DuPont's most successful and profitable businesses. According to the suit, which was filed in several states by two Florida law firms, DuPont nets an estimated $200 million in profit a year from sales of Teflon. The scientific panel's finding could also be bad news for the chemical industry in general if it fuels debate over the use of chemicals in industrial and consumer products, and their potential link to diseases like cancer and to reproductive disorders.

Such concerns have prompted the European Union and Canada to tighten controls on chemical use and labeling. The United States has not taken such steps, in part because the chemical industry offered in the late 1990's to start a voluntary testing program for chemicals produced in volumes of one million pounds or more a year.

This month, the Government Accountability Office criticized the E.P.A.'s ability to ensure that tens of thousands of chemicals in commercial use - and new agents introduced at the rate of about 700 a year - did not pose a health risk. It said the E.P.A., which has used its authority to request health data on fewer than 200 chemicals since 1979, should have more authority.

Senator Frank R. Lautenberg, Democrat of New Jersey, has lined up six co-sponsors for legislation that would expand the agency's powers and require manufacturers to test their chemicals for health risks.

DuPont has objected to the characterization of PFOA as a likely carcinogen, and said initial results from its study of 1,000 workers at its Teflon factory had found no adverse health effect, aside from higher cholesterol in some people. The company, which says PFOA itself is not found in Teflon cookware, added that it intends to vigorously defend itself in the class-action suit. "DuPont believes consumers using products sold under the Teflon brand are safe," said R. Clifton Webb, a DuPont spokesman.

Critics point to PFOA as an example of the need to change how chemicals are regulated. In the 50 years that Teflon has been made, for example, little has been done to assess whether it affects human health - even though the chemical is present in the blood of more than 90 percent of Americans, according to samples taken from blood banks by the 3M Company beginning in the mid-90's.

Chemical makers are not required to test their compounds for toxicity before asking the E.P.A. to clear them for sale, and the agency said that most companies did not test voluntarily. The E.P.A. relies instead on methods, like computer modeling, to prevent harmful compounds from entering the market. Even that screening, however, does not include chemicals that were already in use when Congress passed the Toxic Substances Control Act, the E.P.A.'s main tool for policing industrial chemicals, in 1979.

"The system does not work, and our blood and bodies and tissues are proof," said David M. Ozonoff, a professor of environmental health at Boston University 's School of Public Health .

Researchers are starting to look harder at how far PFOA has spread. The Centers for Disease Control and Prevention plans to include it and related chemicals in a nationwide survey of chemical exposure next year, and DuPont is paying for tests of people near its factory as part of the settlement. The E.P.A. is studying why PFOA is so pervasive and whether it is harmful.

Even if PFOA were shown to cause cancer or some other illness, it would not be easy to ban. Asbestos provides some insight into how difficult it can be to ban a commonly used substance, even when there is evidence of risk. The E.P.A. banned asbestos in 1989 after reviewing more than 100 studies over 10 years and concluding that the substance was a potential carcinogen at all levels of exposure. But in 1991, a federal appeals court overturned parts of the rule, saying that there was not enough evidence; some products were no longer banned, but manufacturers took many of them off the market anyway.

Some public health and environmental activists say PFOA could be the next test case. These critics say that PFOA does not break down in the environment or in the bloodstream, and some studies have found that elevated levels of PFOA coincide with some cancers and birth defects.

"It's been produced for 50 years," said Jane Houlihan, vice president of the Environmental Working Group, an environmental organization based in Washington that has been a leading critic of DuPont. "Why only now are we studying it? That is a system that's completely backwards."

If the E.P.A. were to take action against PFOA, it would be the first major regulation of a chemical in more than 15 years. Of the more than 80,000 chemicals that have been in commercial use since World War II, just five types are regulated: PCB's, halogenated chlorofluoroalkanes, dioxin, asbestos and hexavalent chromium.

One company, 3M, has voluntarily discontinued making another member of the perfluorochemical family, PFOS, a chemical that some European countries may ban.