The Kaduvaiyar estuary located on the Southeast coast of India in Nagapattinam is facing various human-induced pressures, making it highly affected by human intervention. To evaluate the ecological quality of the Kaduvaiyar estuary and its coastal region, an extensive survey was conducted. The assessment employed different statistical analyses, specifically the AMBI and M-AMBI biotic indices. Through PCA analysis, it was confirmed that St-1 exhibited a higher similarity level of Clay and TOC. Furthermore, the CCA analysis demonstrated the presence of pollution-tolerant and opportunistic polychaetes species, such as Capitella capitata, Cossura coasta, Prionospio pinnata, and Notomastus sp., in St-1 and St-2. These areas showed elevated concentrations of heavy metals, including Fe, Pb, and Mn. This trend was also evident in the w-statistics, where the negative values (−0.08 and −0.105) indicated the highly polluted nature of St-1 and St-2. Substantiating this, the AMBI values (ranging from 1.86 to 4.17) suggested that the stations (St-1 to St-3) were slightly to moderately disturbed. The M-AMBI result (ranging from 0.43 to 0.44) indicated a clear signal of the disturbed nature and moderate ecological condition of stations (St-1, St-2). These stations are located near urban and harbor activities, which likely contribute to their altered state. However, it is essential to subject the reference conditions proposed for the Kaduvaiyar estuary to further evaluation in upcoming studies. Additional research will help gain a more comprehensive understanding of the estuary's ecological health and establish a solid basis for comparison with future assessments.