The Environmental Audit Committee inquiry will focus on pollution caused by hand car washes, although it will also look at whether they pose a criminal risk by aiding trafficking and exploitation of workers.
The UK's anti-slavery watchdog has already launched a study into hand car washes over concerns of "endemic exploitation and modern slavery".
There are up to 20,000 hand car washes operating in the UK, with many operating in the car parks of supermarkets and shopping centres or petrol station forecourts.
Cruel human trafficker forced woman to work as sex slave in LeedsThe committee said there are concerns that waste water containing oil and contaminated dirt from cars can harm the environment and pollute rivers, streams and ground water.
The cleaning agents used can also be harmful to wildlife and plant life and the committee will consider how hand car washes compare to automatic alternatives.
Committee chairman Mary Creagh said incorrect disposal of waste could be having a "significant impact on local water sources and wildlife".
Spotlight on the scourge of modern slaveryThe Labour MP added: "The Independent Anti-Slavery Commission (IASC) has also expressed concerns around the exploitation of the workforce at hand car washes.
"We are concerned about the cost to the public purse of tackling criminality, including trafficking, tax evasion and enforcement of minimum wage law.
"Our inquiry will look at the environmental impact of hand car washes and ask how effective the regulations that govern them are.
"It will also ask the Government how it is meeting its commitments under the UN Sustainable Development Goals to reduce human exploitation."
In March the IASC announced an investigation into exploitation in hand car washes following concerns raised in the media of "endemic exploitation and modern slavery".
The Independent Anti-Slavery Commissioner, Kevin Hyland, said hand car washes are a "major area of concern for anyone trying to tackle modern slavery in the UK".
"Numerous reports and investigations have identified problems across the spectrum of labour exploitation," he said.
"This will be an important piece in the puzzle of eradicating modern slavery from British high streets and identify how ethical businesses should prosper."