For years, residents on the east side of this frayed, blue-collar town had two overriding troubles: Their drinking water was foul, and their children were being stricken with leukemia at rates as high as eight times the national average.

Now, in federal court in nearby Boston, eight Woburn families are trying to prove a link between their problems. They contend that toxic wastes dumped by two factories in the 1960s and '70s contaminated the water supply and caused five leukemia deaths, three nonfatal cases of the disease and several other serious illnesses here.

In a case widely regarded as a bellwether for toxic-waste law, doctors for the Woburn plaintiffs intend to present their studies of the victims and their families pinpointing chemicals in the water as the cause of the deaths and illnesses.

The structured legal proceedings in the stately, marbled courtroom bring a certain order to the many broken lives in this city of 36,000 people. But the case also has broad implications for the thousands of other U.S. communities where hazardous wastes have been dumped in unauthorized sites. Besides attempting to set medical precedent, the Woburn families are trying to hold corporations financially responsible for the human cost of toxic waste.

Although plaintiffs cannot ask for specific monetary awards in Massachusetts, the judge noted during pretrial motions that damages in this case could be "astronomical."

The complaint charges that factories owned by two of America's largest corporations -- W.R. Grace & Co. and Beatrice Foods Co. -- negligently disposed of industrial solvents on their properties and that the waste seeped into the underground water supply serving the east side of town.

Grace and Beatrice deny responsibility for contaminating the water and say there is no medical evidence that the chemicals cause leukemia or other diseases.

Courts have sided with victims of unique environmental health problems, such as asbestosis, where cause could be unequivocally traced to a specific pollutant. But efforts to prove damage from toxic wastes have failed for lack of evidence directly tying the suspect chemical to a specific illness or death. Previous cases have relied on animal studies and epidemiological surveys pointing out "statistically significant" increases in a certain injury among populations exposed to a hazardous substance.

What is novel in the Woburn case is that the plaintiffs' doctors say they have identified a direct, causal link between the chemicals in the east side's water supply and the illnesses at issue. They contend that new approaches to environmental health sciences show that the waterborne chemicals damage the human immune system, lowering the body's resistance to leukemia and other diseases.

Moreover, they argue, the same "immune dysregulation" turned up in clinical tests of the victims' families, providing physical evidence of injury. As doctors for the defense challenge the plaintiffs' data, the jury will be asked to take sides in an evolving medical controversy.

"The Woburn case is a proving ground for establishing the causal connection between exposure to toxic substances and injury," said Anthony Roisman, executive director of Trial Lawyers for Public Justice, who helped prepare the complaint. "You can draw a picture for the jury of the injury inside the body of someone exposed to those chemicals.

"If this works, the number of people who would be able to prove their injuries would go up dramatically."

The implications are less academic in Woburn, a gritty city of old shops and wood frame houses wedged between two superhighways 12 miles north of Boston.

As a national center of tanneries, piggeries and chemical companies earlier this century, Woburn has long been known as a "community of odors." But it prided itself on an ample and pure water supply until the mid-1960s, when two new wells were opened in the Aberjona River valley to serve the city's burgeoning east side.

Residents often complained that the water was bitter, dirty and pungent, that it corroded their pipes and blackened the insides of dishwashers. Officials tested the water frequently for organic purity and declared it potable.

The contamination was discovered by coincidence in May 1979. State environmental authorities, responding to a report that barrels containing polyurethane had been dumped upstream along the Aberjona, decided to conduct the first chemical analysis of the two wells -- named G and H -- serving the east side.

They found heavy concentrations of two industrial solvents, trichloroethylene (TCE) and perchlorethylene (PCE), both regarded by the Environmental Protection Agency as potential human carcinogens that also can cause liver, kidney and nervous system damage in high doses. They are commonly used by industry to clean grease from machines.

The two wells in east Woburn were immediately shut down, and the EPA began testing the area's ground water to determine the origin of contamination. The investigation, according to the plaintiffs, indicated at least two major sources of TCE and PCE by tracing the pollution to its highest levels, or "plumes."

One plume originated northeast of the wells, behind a food-packaging machine plant owned by Grace. High concentrations of the chemicals also were found southwest of the wells on 15 acres of marshy, wooded land bordering the Aberjona on one side and a tannery on the other. Beatrice bought the tannery and adjacent land in 1978 and agreed to assume all environmental liabilities of the property.

Grace and Beatrice say they are victims of neighboring industrial polluters. Even if their property was contaminated, they argue, the chemicals could not have seeped as far as the underground water system.

The discovery of contaminated water came as little surprise to Anne Anderson, then a Woburn housewife whose son, Jimmy, developed leukemia in 1971 at the age of 3. She had suspected pollution as the cause of Jimmy's illness after learning that two other neighborhood children had leukemia.

After the state confirmed her suspicions, Anderson's minister wrote a letter to The Woburn Times calling for a meeting at Trinity Church of families whose children developed leukemia after wells G and H were opened.

"The phone kept ringing, not just from people with leukemia," recalled the Rev. Bruce Young. "Others were saying that we have a lot of heart trouble in the community, there's a lot of liver disease, lots of kids have learning disabilities."

Forty people came to the meeting. Young handed them a health questionnaire and sent copies to other Woburn residents.

The results of his survey and later studies were alarming enough that the federal Centers for Disease Control in Atlanta designated the hardest-hit part of Woburn as a leukemia cluster.

Fourteen local children developed the disease from 1969 to 1982, 12 of whom lived in the east side while wells G and H were providing most of their water. The cluster was formed by eight youngsters who lived nearest the wells and within a half-mile of each other.

According to lawyers for the plaintiffs, the national average for juvenile leukemia in an area that size is zero.

Leukemia rates were highest among families closest to wells G and H, the lawyers contend, because they received all their water from the two contaminated wells. Residents farther away drew a mixture of water from G and H and other municipal wells.

"We were being poisoned at the time and just didn't know it," said Donna Robbins, 36, whose son, Robbie, was diagnosed with leukemia in 1976 and died five years later at the age of 9.

Robbins had consulted a local lawyer in 1978 about an injury Robbie suffered during surgery and was referred to a Boston firm specializing in medical malpractice. When the wells were condemned several months later, Robbins suggested a suit including the families of other leukemia victims. The Boston lawyer passed the case to a young associate, Jan Schlichtmann.

Schlichtmann filed the complaint in May 1982 for families of seven children first exposed to the water from G and H wells while in their mothers' wombs. The five who died ranged in age from 3 to 12. Two other children are now in remission. His eighth client in the case, a 39-year-old man, is receiving treatment.

The family of a sixth east Woburn child who died of leukemia did not enter the suit.

The case attracted interest outside Woburn as the nation began focusing on the health dangers of toxic waste.

Harvard's School of Public Health conducted an epidemiological survey of Woburn and concluded in a 1984 report that "increased availability" of water from wells G and H was "positively associated" with the risk of childhood leukemia, respiratory diseases and kidney disorders.

But the heart of the Woburn case is expected to be the detailed medical histories and blood tests of surviving family members -- evidence, according to Schlichtmann, of individual injury directly caused by TCE and PCE.

Dr. Alan S. Levin, a San Francisco specialist in immunologic and environmental disease, said in an affadavit that TCE and PCE are potentially carcinogenic and that tests of surviving family members show elevated counts of certain blood cells "consistent with a compensatory response to resist the effects of a carcinogen."

Although they have not developed leukemia, the survivors suffer from several ailments -- including upper respiratory infections, cardiac arrhythmia, depression, nausea, chronic rhinitis, skin rashes -- that another doctor contends are "the effects of chronic solvent poisoning due to the contamination of the domestic water supply."

For Donna Robbins, the psychological trauma is equally serious. "In the first couple years after Robbie's death, all I could think about was the water and Robbie," said Robbins, a registered nurse. "It doesn't go away."

Robbins said her marriage collapsed under of the strain of Robbie's illness and that her second son, Kevin, 11, who suffers from skin rashes and infections, is "filled with pain" from the loss of his brother and the fear of developing the disease.

Schlichtmann, 35, now in his own small firm, said he has devoted all of its resources to take on the court battle, which is expected to run into the summer and cost the plaintiffs more than $2.5 million.

"It's a case of corporate poisoning of the entire community," he said in an interview. "For the first time, it's an opportunity for our society to declare that the conduct of these corporations in contaminating the ground water system is wrong."

Michael Keating, chief trial counsel for Grace, said corporate attorneys are closely watching the case for any precedents establishing the link between injury and industrial pollution.

He said he fears that with a "highly charged issue" involving wealthy out-of-state corporations, "one plus one equals victory" for the plaintiffs. If the defendants prevail, he said, it would prove that "emotion won't carry the day.