Environmental impacts of water resource projects are assessed with a dynamic simulation model for forecasting regional economic and demographic changes and their interactions with water supply and water quality over time. The model was applied to the Massachusetts portion of the Connecticut River Basin. Modular sectors were developed to forecast regional population and industrial levels, intra-regional land use patterns, and recreational activities. These are linked to a water sector which models stream flows, water supply withdrawals and consumption, and water quality in terms of dissolved oxygen and carbonaceous and nitrogenous oxygen demand. Water quality is based on both point wasteloads from domestic and industrial sources and dispersed source wasteloads from urban runoff. A final module represents biological activities in a stream, including algal concentrations and fish populations.