We have studied the urbanization effect on water resources of a developing semi-urban area on the southeast side of Chattogram (Chittagong) city, enduring industrialization and subsequent urbanization. The landcover comprising water bodies, vegetation, and agricultural lands were 9.36%, 40.55%, and ∼37%, respectively. Domestic water demand was estimated by interviewing households, while water samples were collected using the grab sampling method from rivers, canals, ponds, and groundwater for laboratory analysis. Daily average water consumption increases with growing family size and income. 52.14 million liters per day (MLD) water is needed for households in the study area, with a per capita demand of 123.80 L per day. The daily maximum water demand range of households was 78.20 MLD – 104.27 MLD, with the peak hourly demand being 5.87 MLD. However, available aquifer recharge is estimated as low as 11 million m3 per year. Except for some points, the average pH, TDS, and Cl− values were acceptable, though EC, SS, and COD values were exceeding the water quality standards with a small amount of HCO3− and no CO3− values in the water samples, making the water of the study area less compatible for domestic purposes. The primary causes were waste disposals, saltwater intrusion, and a few instances of industrial discharge. The settlement landcover directly influences water quality parameters pH, TDS, and conductivity in compositional analysis. We believe that expanding the build-up area to the vegetated area will eventually induce water quality degradation, mainly saline water intrusion.