The water quality of the aquifer of the El-Oued region (Algerian Sahara) is deteriorating in water quality due to anthropogenic effects and over exploitation of the groundwater resources. This study assesses the quality of groundwater in the El-Oued shallow aquifer for domestic and irrigation purposes and highlights the various geochemical processes that contribute to the mineralization of this water. Twenty-five water samples were collected. The measured and analyzed parameters are: pH, EC, TDS, Na+, K+, Ca2+, Mg2+, Cl−, SO42−, NO3− and HCO3−. The assessment of water potability using the Water Quality Index (WQI) method shows two classes of water quality, namely, the very poor class (8%) and the unsuitable for drinking class (92%). Agricultural water quality was assessed using the parameters; electrical conductivity (EC), sodium adsorption ratio (SAR), sodium percentage (Na %), Kelly ratio (KR), permeability index (PI), magnesium hazard (MH), residual sodium carbonate (RSC) and chloride content. The results showed that the water of this shallow aquifer is unsuitable for irrigation based on EC, Cl− and USSL diagram. This aquifer discloses three facies of water: Cl–Na–Ca (12%), SO4–Na (36%) and SO4–Ca–Mg (52%). In addition, an analysis of physicochemical data obtained from water samples was conducted using correlation matrices, PCA, bivariate plots, and Gibbs diagrams; the saturation indices of the main minerals was also calculated. These analyses have shown that the main reactions responsible for the evolution of water types in the El-Oued shallow aquifer fall into four categories: (1) a mixing process in the waters of deep aquifers (the Complexe Terminal aquifer and the Continental Intercalaire aquifer); (2) the dissolution of salts (in particular, gypsum and halite); (3) cation exchange processes affecting the concentration of Na+, K+, Mg2+, and Ca2+; and (4) anthropogenic influences from domestic sewerage and agricultural activities.