Water resource management based on dam construction, diversion, and other engineered hydraulic structures improves conditions for humans living in arid and semi-arid areas. However, the effects of damming on fluvial and coastal ecosystems are well-know, as it is the fact that economic and social development based on water management might enhance the pressure on such environments. This study gives a first basin scale representation of the possible effects of water resource management on hydrology and water quality of a typical semi-arid watershed/ estuarine system in Northeastern Brazil. Although the dam cascade suggests a hydrological alteration of the stream flow, the upstream location of dams in the Cocó watershed does not apparently alter the total discharge to the estuary. Water quality threats, such as high fecal coliform levels and low dissolved oxygen indicated that although water management supported extensive economic and social development, it resulted in considerable degradation of aquatic systems if no attention was paid to environmental and sanitary conditions.