The accident happened on the A37 at Ston Easton at around 7.30am on Sunday.
The tanker lost around 20,000 litres of milk after one of its main filler caps was damaged.
Fire crews set up a dam to reduce the amount of milk flowing into the Wellow Brook, a tributary of the River Somer which flows through Midsomer Norton. They also pumped off around 50,000-litres of milk, and diesel from a ruptured fuel tank, that had made it to the watercourse.
The measures taken, combined with a boom set up by the Environment Agency, managed to confine the pollution to a 150-metre stretch of the stream.
A spokesman for the agency explained that milk can be very damaging to aquatic life as it strips oxygen from water. He said that although water running through Wellow Brook was discoloured for a few days, it is now running clear and drinking water has not been affected.
He said the Environment Agency will continue to carry out tests on the watercourses but is encouraged by sightings of live fish in Wellow Brook since the incident.
"The environmental impact of the spillage is thought to be minimal, with no reported fish deaths," he said.