A study done by Siberian researchers, unpublished but leaked to the journal Nature, blamed unburned hydrazine fuel released during early stages of takeoff from the Baikonur Cosmodrome in neighboring Kazakhstan, the BBC reported Thursday.
"A tablespoon of hydrazine in a swimming pool would kill anyone who drank the water," said Fabio Caramelli, an engineer at the European Space Research and Technology Centre.
The researchers looked at 1,000 children living in Russia's Altai Republic and found rates of disease more than double the norm.
Children from the worst affected areas were up to twice as likely to require medical attention from 1998 to 2000 as 330 children from unpolluted areas.
The Baikonur station, which Russia rents from Kazakhstan, was built in the 1950s as a missile testing facility but is now one of the world's largest launch stations. The station was made famous in 1961 when Yuri Gagarin made history by becoming the first man to orbit the earth after taking off from the station.
The Russian space agency has rejected the study.