People living close to the plant in Monkton Lane, Farnham, have complained that the stench has recently got worse.
Thames Water, which manages the site, said emergency repair work could be the cause, but that it had written to residents to explain the situation.
Local councillor Roger Steel said he had been inundated with complaints, but the firm said it was not aware of any.
He said the Farnham Sewage Treatment Works was built 100 years ago and the odour problem was not new.
"In the summer residents are not able to open the windows when it's hot, children can't play in the garden.
"The odour gets into their clothes, even the wallpaper," Mr Steel said.
The councillor, who represents Farnham Moor Park on Waverley Borough Council, said the plant was too old to cope with the current population it served.
"There's plenty of room for them to perhaps rebuild a new plant or even to make major additions for it to be able to cope.
"It's been inadequate for years and years and years," he said.
In a statement, Thames Water said: "We're sorry if residents have noticed an increase in odour, but we're not aware of any complaints and [have] not noticed any difference.
"We sent a courtesy letter to inform residents we would be doing a piece of cleaning work, outside of day-to-day operations.
"Work stated last Tuesday, and is going well - we're ahead of schedule."
Residents in a Surrey town have claimed their lives are being made a misery due to the smell from nearby sewage works.