WASHINGTON (AP) _ A rural Missouri community is the nation's largest waste site for the chemical PCB because of corporate mismanagement and federal regulatory failure, a congressman says.

Rep. Mike Synar, D-Okla., called the plight of Holden, a community of nearly 2,200 people in western Missouri, a ''frightening story'' that could happen elsewhere because of flaws in the nation's system of PCB disposal. PCB, or polychlorinated biphenyls, has been found to cause cancer in laboratory animals.

Synar made his remarks as the House Government Operations environment subcommittee, of which he is chairman, opened hearings Wednesday on the Martha C. Rose Chemicals plant, which halted operations in Holden last March.

''It is a story of how a company of questionable integrity collected millions of dollars for services never performed,'' Synar said. ''And it is a story of how the federal government has failed in its responsiblities to ensure a safe and healthy environment.''

Lawmakers were told that an estimated 15 million to 20 million pounds of PCBs remained stored at the plant, and a cleanup could cost at least $20 million and take perhaps two years to complete.

Contamination at the idled chemical processing plant could ''wipe out that entire town,'' said Philip E. Badame, president of Environmental Technology Inc. The New York company investigated a possible cleanup of Rose Chemicals.

''If you think Love Canal was bad, it is worse out there,'' he said. ''That is a time bomb out there. If there is ever a fire at the Holden facility, the dioxin that will be given off from the combustion of the PCB oil will wipe out that entire town.''

The state environmental agency has found PCB contamination in streams near the plant and in the city's sewage treatment sludge. Holden is about 40 miles east of Kansas City.

Badame largely blamed the problem on poor regulation and enforcement by the Environmental Protection Agency's regional office in Kansas City, Mo.

Rose Chemicals is the subject of involuntary bankruptcy proceedings by its creditors. In 1982 it began processing and disposing of materials contaminated with PCBs.

The chemicals are heat-resistant compounds used mainly as coolants in transformers, capacitors and other electrical equipment.

EPA Regional Administrator Morris Kay conceded there was extensive contamination at the plant but maintained that regulators had properly approved permits for the operation and had adequately monitored it.

The EPA had found record-keeping problems and other violations in inspections since 1983. Fines were assessed and the company agreed to correct the problems, he said. The violations continued, however, and the agency revoked the company's permits last month.

The agency has referred the case to the Justice Department for regulatory violations and is seeking to recover $74,000 in fines from Rose Chemicals. Kay also said EPA is negotiating with a group representing the generators of the waste, mostly utility companies from across the country, to determine a way of removing the materials and cleaning up the site.