Bay View Rd resident Lew Campbell has started gathering signatures on a petition against the proposal, and plans to take a submission to resource consent hearings when they begin.
It is the second time he has done so, after fighting in 1988 against a similar proposal that was eventually withdrawn.
Hope and Sons has applied for resource consent to install the cremator at its business, on the corner of Andersons Bay Rd and Oxford St, near a food outlet, supermarket and homes.
The move is expected to halve the number of cremations at the Dunedin City Council's Andersons Bay facility.
Hope and Sons has said its cremator was designed for "sensitive" areas, and new technology meant there would be no visible emissions apart from a heat haze.
The company is applying to the Otago Regional Council for a discharge to air consent, and to the Dunedin city Council for a consent to establish and operate the cremator.
A joint hearing of the two councils is expected.
Mr Campbell said he had begun gathering signatures only this week, but already had 40 or 50.
About 80% of people he asked had signed.
He and other residents were concerned about the possibility of toxins from the cremator's chimney.
Having a cremator near homes was "a huge concern".
"We don't want the emissions coming down on the clothes line, or when we're eating our lunch."
A group of residents had met South Dunedin Labour MP Clare Curran.
Ms Curran said yesterday she had provided assistance, and had asked Hope and Sons for a meeting, but was not taking a position on the issue at this stage.
Another nearby resident, Bev Lyon, said people she had spoken to were "very much against the cremator".
"Why do we need it in such a densely built up area occupied in the main by elderly folk, when there is a perfectly good crematorium not far away?"
Real estate agencies she approached told her the properties nearby would be devalued "at least for a year or two".
Moira Hoyt, of Cashel St, was concerned the company was applying for use on any day of the week.
"It gives it [the company] the opportunity to use it any time it chooses.
"Are there any other light industries around this area that have that sort of leeway? I'm sure there aren't."
All three residents said they planned to make a submission to the resource consent process.
Restaurant Brands, which owns the Kentucky Fried Chicken store on the other Oxford St corner, indicated yesterday through a spokeswoman it would make a submission on the issue, while a spokesman for Progressive Enterprises, which owns the Woolworths supermarket across the road, said the company had yet to make a decision.
