The army started bulldozing piles of rubbish in Caserta, near Naples before dawn, concentrating in areas around schools initially.
Schools reopened on Monday after a break for Christmas holidays, the defence ministry said.
It is the second time in a year that the army has been called in to deal with a rubbish crisis.
In May several towns in the region were forced to close schools due to health concerns after rubbish piled up on the streets.
This time more than 100,000 tonnes of garbage has been left on the streets, and residents have started burning trash.
This has led to firefighters having to extinguish blazes around the clock and fears of toxic fumes.
Full dumps has caused periodic pile-ups in the region for more than a decade.
New dumps
Citizens are unwilling to let new dumps be opened or re-open old sites.
Clashes have occurred between residents and police in the suburb of Pianura.
Residents set up roadblocks to stop the re-opening of long-closed dump, saying it would pose a health risk.
Local officials who had promised to solve the problem have been called to resign over the latest crisis.
The infiltration of organised crime into garbage collection services, unorganised bureaucracy and the protests have been blamed by authorities for the problems.