E. coli is a type of fecal coliform bacteria commonly found in the intestines of animals and humans. E. coli is short for Escherichia coli. The presence of E. coli (and fecal coliforms) in water is a strong indication of recent sewage or animal waste contamination. Sewage may contain many types of disease-causing organisms.
Additional information is available at http://water.epa.gov/drink/contaminants/basicinformation/ecoli.cfm.