The Environment Agency served Hinton Organics with the notice on 20 May after receiving complaints about odour from its site in Queen Charlton near Keynsham, Bristol.
The company processes around 12,000 tonnes of green waste a year from South Gloucestershire and Bath and North East Somerset.
Visiting the site in May, Agency officers found it to be storing "almost 50 per cent more waste than authorised" - some on bare ground, contrary to its waste management licence. The waste could also be smelt up to a quarter of a mile from the site.
The notice prevents the company taking waste until it has taken steps to reduce the volume of waste and control odours. The company had until 3 June to comply.
The notice marks the company's second run-in with the Agency in recent months. In January, it was fined £4,000 with £1,200 costs by Wandyke magistrates after admitting seven breaches of its waste licence (ENDS Report 361, p 60 ).
The company had been storing waste on the ground and allowing liquor to leak into the earth and watercourses.
Hinton Organics said the current problems started when it stopped processing waste in May. A strong easterly wind had developed that threatened to cause odour problems for nearby residents.
The company did not stop taking in waste, however, and this led to a build-up of material.