The southern Gabès aquifer in southeastern Tunisia faces significant stress due to unsustainable groundwater extraction. This study employs a SEAWAT model to evaluate groundwater losses, salinization mechanisms, and the interaction between the confined aquifer and the Mediterranean Sea. The model, incorporating well pumping rates, regional freshwater inflows from the Matmata Mountain Range, and the Mediterranean Sea boundary, demonstrated high accuracy in simulating hydraulic heads. Findings reveal that regional inflow is only half of the current pumping rate, indicating unsustainable groundwater use. The study also assessed salinity dynamics by modeling the Mediterranean Sea as a constant head and salinity boundary. Results suggest limited exchange between the aquifer and the sea, challenging previous assumptions. While the immediate risks of salinization are low, continued over-extraction could compromise the aquifer’s long-term sustainability. This research highlights the need for stricter local groundwater management, offers insights into regional coastal aquifer interactions, and contributes to global discussions on managing stressed aquifer systems.