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Coastal lakes and estuaries are considered economic drivers for coastal communities by delivering invaluable economic and ecosystem services. The coastal ecosystems are facing recurrent hypoxia events (dissolved oxygen; DO < 2.0 mg L−1) and are emerging as a major threat to ecosystem structure and functioning. The Ashtamudi Lake, (area = 56 km2), is one of the Ramsar sites in the State of Kerala and located on the SW coast of India. The waterways are extensively used for backwater tourism and for fishery activities. This paper discusses the spatio-temporal variation of water quality attributes with emphasis on hypoxia during non-monsoon and monsoon seasons. The extent of hypoxia on fishery diversity was discussed. The Southern Zone, adjacent to the urban area, shows the hypoxic condition with higher concentration of BOD, NO3-N, and NH4-N. The hypoxic condition is largely limited to the Southern Zone in both seasons. The occurrence of low DO in the lake is highly related to salinity and organic load in the lake system. The tracking of pollution sources in the lake system was also done through identification of pollution potential zones and found that catchments adjacent to Southern and Western Zones (urban regions) are the major source of pollution. The study suggests that hypoxia is chiefly attributed to anthropogenic interventions in the form of discharge of wastes into the lake causing overloading of nutrients and organic effluents, decrease in the freshwater supply, the absence of proper freshwater mixing or dilution, and effluent discharge from nearby urban centers. [ABSTRACT FROM AUTHOR]