Increasing urbanisation of coastal areas is leading to impacts on coastal lakes which decrease their amenity for recreation and tourism. Runoff and wastewater discharge cause siltation, impact seagrass beds and change the characteristics of open waters, affecting boating, swimming, fishing and the aesthetic quality of the locale. Management of urban development and wastewater disposal is required to minimise sedimentation and nutrient enrichment. This could include development restrictions, runoff controls and a strategy for wastewater treatment and discharge. The catchment of Lake Macquarie, a marine coastal lake, has been progressively urbanised since 1945. Urbanisation, through increased stormwater runoff and point source discharges, has caused a major impact on the lake in terms of sedimentation and nutrient enrichment. Losses of lake area and navigable waters have occurred. Accompanying problems include changes in the distribution of seagrass beds and nuisance growths of benthic algae. Since the 1950's, dry weather nutrient concentrations have increased and mean water clarity has decreased. Severe problems, as observed in other New South Wales coastal lakes, for example benthic algae in Lake Illawarra and Tuggerah Lakes, have not yet developed. Because of the lead time taken to implement policies and controls, trends should be identified and policies developed now so as to avoid nutrient buildup and development of sustained problems.