One month ago, floods forced the 2,500 residents of this devastated little town from their homes. Now, as they return to resettle along the banks of the Meramec River, the federal government has found a more frightening menace and may relocate the entire town on higher ground.

The villain is dioxin, a chemical suspected of causing cancer and found in dangerous amounts here by the Environmental Protection Agency only a day after much of the town was washed away Dec. 5.

Today, half a dozen EPA technicians wearing white plastic suits, rubber gloves and respirators stalked through here, digging new dirt samples to determine if flood waters had spread the poisonous chemical to other sites.

Initial soil samples taken here Dec. 6 were found to contain high levels of dioxin. Waste oil containing the chemical was spread on dirt roads here 11 years ago to keep down dust, and officials now fear it may have been widely used on the state's dirt roads in the early 1970s.

Dioxin, a waste byproduct of certain pesticides, was described in a recent EPA memorandum as "a potent carcinogen, perhaps even the most potent one known to man." It has been detected in at least two other Missouri communities, officials said. Of 90 samples unearthed in different parts of Times Beach and tested last month, only four did not contain dioxin, said Bill Keffer, director of the EPA's emergency response team here.

The chemical clings tenaciously to soil, moving only when the dirt is dug up or flushed with water, as in the floods here, officials said.

The federal Centers for Disease Control in Atlanta urged residents to leave last month because of the contamination, but 300 residents are estimated to remain, sheltered in flood-damaged house trailers and muddied homes.

Most say they cannot afford to move. Residents voted themselves out of the federal flood insurance program, so their dwellings are not insured.

Many of those who remain have shrugged at the dioxin warnings, and today a few stood laughing at what they called the "moon men" digging in garbage dumps and scraping furniture outside homes.

"I've been here for 10 years, and dioxin hasn't bothered me yet," Mayor Sid Hammer said. "I'm not afraid of it at this point."

But most of the locals hailed the Corps of Engineers' preliminary proposal to relocate the town upriver at an estimated cost of $75 million.

"It's a miracle," said Don Maxwell, 26. "You couldn't ask for nothing better if the Lord came down and put it in your hands."

Rep. Robert A. Young (D-Mo.), whose district includes Times Beach, a blue-collar town 20 miles west of St. Louis, announced the recommendations Tuesday in Washington.

"The residents of this community have suffered enough," he said. "It is time to look at what is best for their future. It would be a far easier task for these people to pick up and move on to a new location than to continue to attempt to fight the incredible odds of trying to clean up and rebuild."

Young favored paying for the move with money from the EPA's $1.6 billion fund for hazardous-waste cleanup, but EPA officials said today that it was too soon to talk about such a dramatic relocation.

Bill Hedeman, director of the so-called "Superfund" program, said there is no rush because residents can be relocated temporarily as flood disaster victims. President Reagan declared this a disaster area Monday.

Congress passed the Superfund bill in 1980 to pay for cleaning up the nation's worst hazardous-waste dumps over the next five years. About 420 sites are on an EPA "national priorities list," but Times Beach, one of 15 sites in Missouri contaminated by dioxin, is not.

One EPA official said results of dioxin tests here were not known until three days after the priorities list was released Dec. 20.

To become available for a full-scale cleanup and relocation program under the Superfund law, Times Beach must be added to the list by EPA officials. But the officials could also authorize cleanup under an emergency program.

Hedeman said the EPA would await results of post-flood testing, expected to take at least three weeks, to determine whether to take those steps.

Levels of dioxin ranged as high as 120 parts per billion in two samples taken here last month.

Medical studies on animals have determined that only a few parts per billion of dioxin, the same chemical found in the defoliant Agent Orange, can cause cancer and birth defects.

The chemical's effect on humans has never been documented, but the Centers for Disease Control has launched a $125,000 health study of Times Beach residents who believe they were exposed to high concentrations.

Several locals asked EPA officials to test their homes, and many accused EPA of taking too much time to confirm the contamination.

Mayor Hammer is among those who has moved back to his home with his wife and parents. At a town meeting tonight in nearby Eureka, he advised those who were "afraid of it, to go get temporary housing. If you're not, move back in."

But Alderman Harold Goodman urged residents to heed warnings. "In my own heart, I think it's dangerous," he said. "We've got children to worry about. Until it's declared officially safe, I can't recommend going back in."

"People want action right away," EPA official Gene Lacero said. "But we don't only have Times Beach to worry about. We have 20 to 70 sites across the country. If we move Times Beach, we have to move them, too.

"One can't move so quickly without acting on one's best information and the best judgment," he said. "We don't feel we have that yet. All the people in Times Beach see is delay. I wouldn't ask them to sympathize with our viewpoint."

More than 850 Times Beach residents have been moved to temporary housing by the Federal Emergency Management Agency, one of 12 federal agencies working on the dilemma.

In a preliminary report circulating among team members here, the Corps of Engineers, one of the agencies on the flood-hazard team, suggested moving the town.

"It's just a proposal," said Patrick J. Breheny, FEMA's regional director. "They want to merge flood control money and Superfund money."

To move the town, Young said he favors using Superfund money to augment $20 million Congress allocated in 1981 to solve flooding problems on the Meramec. The money was never spent after local residents rejected building a dam.

Now they face rebuilding from a flood on land contaminated by dioxin.

"It's a double whammy," said Jim Webb, Young's legislative aide. "We'd like to see federal agencies combine resources to relocate the town out of the flood plain to an area free of dioxin."

But Col. Charles Myers, assistant director of the Corps' Civil Works office in Washington, said a cost-benefit analysis must be done to see if it is cheaper to detoxify the town and rebuild it or move it upriver.

"There is a precedent for relocation," he said. "But we'd not only need legislation authorizing it, but a study to show the cost would be offset by the benefits.