Machado had often reported illegal logging and shipments of lumber in Para, a largely lawless state where American nun and rain forest defender Dorothy Stang was killed in 2005.
Machado told the environmental protection agency Ibama that locals were forced to deliver wood to loggers and were killed if they refused.
"He made various complaints to us, and we seized lumber and boats thanks to his reports," Anibal Picanco, Ibama's superintendent in Para, said in a televised interview.
Phone calls to police in Tucurui went unanswered Saturday.
Para has been targeted in a government crackdown after satellite photos showed illegal logging in the Amazon was on the upswing.
In February, officials seized more than 10,000 cubic feet of wood and shut down three saw mills in the town of Tailandia. Some 2,000 enraged residents burned tires, blocked roads and forced Ibama workers to flee. The government sent in federal police and troops to restore order.
Brazil has strict environmental laws that require landowners in the Amazon basin to keep 80 percent of their forested areas standing and file detailed forest management plans before they can harvest wood.
But the laws are routinely flouted, and there aren't enough federal agents in the region to enforce them.