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Benthic foraminifera from twenty stations sampled twice were analyzed in order to examine the environmental conditions of the Albufeira coastal lagoon. Foraminiferal assemblages show an increase in the abundance, species diversity and allochthonous content seaward. Three zones have been defined: the inner and more restricted area of the lagoon where the main species are the euryhaline Ammonia tepida and Haynesina germanica; these two species together with Bulimina gibba and Brizalina britannica dominated the middle area; and, finally, in the mouth and marine- influenced back-barrier area the assemblages are made up of brackish and marine species such as A. tepida, Cribroelphidium williamsoni, Cibicides lobatulus and H. germanica. Additionally, samples from three cores were also examined. Sedimentological and micropalaeontological contents represent the last 2500 years of environmental evolution of the lagoon. Foraminiferal assemblages are not very abundant and they are dominated by H. germanica, A. tepida and Jadammina macrescens indicating very restricted conditions through time. In a regional context, and during the Late Holocene, after the development of a detrital barrier circa 5.5 cal yr BP, eustasy is considered to be a minor environmental control of the barrier-lagoonal system dynamics. Instead, environmental conditions were forced by local factors, such as frequency and duration of lagoon-ocean water exchanges, induced by both natural and artificial changes in the permeability of the sand-barrier.