National Environment Management Authority (Nema) officials impounded 100,000 plastic bags and arrested four traders in Kagio town in Kirinyaga County.
Acting on a tip-off, the officials stormed the town on Wednesday and found the traders selling the bags.
However, some suspects escaped in the confusion. County Nema Coordinator Phanwell Simitu said the traders have been purchasing the banned bags from unscrupulous merchants in Nairobi and selling them in total disregard of the law.
He described one of the suspects as a notorious plastic bags dealer who has evaded arrest for long.
"We have finally caught up with the businesswoman who has been on Nema's list of 'most wanted offenders',” said Mr Simitu.
The suspects were taken to Kerugoya Police Station for questioning.
Mr Simitu said the war on illegal trade was still on and those found in possession of the banned bags would be dealt with ruthlessly.
He warned that those apprehended risk being fined Sh2 million or jailed for two years if convicted.