Prajob Nao-opas was gunned down by unknown assailants in broad daylight on Monday in Chachoengsao province, east of Bangkok, as he waited for his pickup truck to be repaired at a garage.
The village headman had led a year-long campaign to expose illegal waste dumping in two districts after ponds in the area were contaminated with toxic chemicals from nearby industrial estates.
"I will give weight to the motive being his role as the leader of villagers in opposing waste dumping," said Police Major General Niwat Rattanathamwat who is leading the investigation.
The victim had exposed 10 allegations of waste dumping some of which are already under investigation, he said, adding police will look "case by case" for a possible link to his murder.
Human Rights Watch called for a full, transparent probe into the killing, which came despite police being aware of "explicit threats" to his life.
"The cold-blooded killing of Prajob marks yet another example of the fundamental failure of Thai authorities to protect activists who risk their lives while defending their communities," said Brad Adams, Asia director at Human Rights Watch.
"The government must undertake a serious investigation to bring those responsible for his death to justice, regardless of the status or political affiliation of the killers."
The group says more than 30 human rights defenders and environmentalists have been murdered in Thailand since 2001, with the few people charged having the least culpability, such as getaway car drivers.