Bright yellow, watery stool indicates that food is passing too quickly through the digestive tract, according to About.com. Yellow stool is common in people with gastroesophageal reflux disease, or GERD. It can also indicate problems in the gallbladder and liver.
Yellow, oily stool is a warning sign, says About.com. If it occurs suddenly, it can indicate a bacterial infection in the intestines, but if it is chronic, a malabsorption disorder such as celiac disease may be interfering with the processing of nutrients and fats. Pale yellow stools can also occur when a blockage in the liver is preventing the bile production that gives the characteristic yellow or brown color.
Yellow-brown stool in infants and toddlers is not always a cause for alarm, states Johns Hopkins Children's Center. Baby stool comes in multiple shades and textures. Yellow stool can sometimes be a symptom of giardia, a parasitic disease accompanied by foul-smelling diarrhea and watery stools. However, in general, the only colors that indicate something seriously wrong are red, black and pale yellow.
If the watery stools progress into full-blown diarrhea that persists for longer than a few days, LiveScience warns that dehydration is a real risk. Diarrhea typically occurs when the body is attempting to rid itself of toxic substances.