Leaflets purporting to be from a US white supremacist group have been sent to homes on an estate in St Helens.
The recruitment material, which claims to be from the Creativity Movement, was delivered around the Fairbrothers estate in Earlestown last week.
Councillor David Banks said: "I don't know how many they targeted but residents are worried."
St Helens Council Leader Derek Long reported the content to Merseyside Police who are investigating.
Mr Long said: "As they contain statements of racial hatred, I immediately referred them to the police."
The US-based Southern Poverty Law Center, a non-profit legal advocacy organisation, classes the Creativity Movement as a neo-Nazi hate group, the Local Democracy Reporting Service said.
Mr Banks, who represents the Earlestown ward for Labour said: "I am alarmed to say the least.
"It's a mystery why an American white supremacist group would be targeting Earlestown."
On Sunday, Labour's Jeanie Bell tweeted that residents in Market Street in Newton-le-Willows had also received leaflets allegedly from the group.
The councillor urged residents who receive any of the racist material to inform the police.
A police spokesman said: "Merseyside Police can confirm officers have been made aware of leaflets delivered to residents in the Earlestown area.
"The matter has been referred to specialist officers who are examining the leaflet to assess if a criminal offence has taken place."
Seve Gomez-Aspron, ward member for Newton-le-Willows, said: "Free speech comes with the responsibility of not preaching racism or hatred.
"No form of extremism or racism will be tolerated by our community."