Authorities have recovered the bodies of an Indonesian woman and a Bangladeshi man who drowned when the Bertam River in the Cameron Highlands overflowed, said district police chief Zahari Busu.
A 17-year-old Indonesian girl is still missing, while at least 80 squatter homes along the river have been destroyed, he said.
The water had to be released from the dam following heavy rain to prevent it from bursting, he added.
"The floodgates were opened as there was too much water. The river couldn't take it," Zahari said.
Landslides in the area, some 300 kilometres north of the capital Kuala Lumpur, are common. A landslide in a village occupied by indigenous people killed seven in 2011.
Many foreigners from Bangladesh, Indonesia, Nepal and other poorer countries in the region work in the tea plantations as well as vegetable and fruit farms.