Situated in the coastal belt of Orissa in India, Lake Chilika has been designated under the Ramsar Convention as a Wetland of International importance (IUCN) especially as water fowl Habitat (Iran, 1981). But, during the last few years the Lake has developed serious environmental problems so much so that the Bureau of Ramsar convention has placed it on its red list. Among those problems, the siltation at the Mugger Mukh (one ofthe openings ofthe Lake to the sea) and consequent reduction in tidal waves, decrease in the depth of water level, decreasing salinity, shrinkage of Lake area, deterioration of the condition of the Nalabana Bird Sanctuary situated in the Lake have been cited as the major ones. While various natural factors have been attributed to such an environmental degradation, an artificial factor i.e. shrimp aquaculture practiced by a few economic elites of the state and also a group of businessmen has been cited as a potential cause. The economically marginalized and environmentally conscious fishing community living near the Lake have thus started a very powerful movement supported by various other sections of the state. Since the Lake ecology and sustainability of the marginalized fishing masses are interrelated in this case, the paper attempts to focus on the artificial problem that has substantially contributed to the environmental degradation and analyze the socioeconomic problems that have evolved in a sociological context.