Manmade, dead-end canals are common in residential developments along the coastal bays of Delaware and Maryland. The close proximity of housing to the water and the concentration of boating activities enhances the potential for anthropogenic stress to living resources in these poorly flushed aquatic systems. Measurements of water quality, sediment contaminants, and benthic macroinvertebrate assemblages were taken in 25 randomly selected canals and compared to 175 non-canal sites located throughout the coastal bays. The mean bottom dissolved oxygen concentrations in canals was half that found in non-canal sites. Mean water-column and benthic chlorophyll concentrations were, respectively, two times and four times higher in the canals. Sediment contaminant concentrations were significantly higher in the canals compared to the coastal bays, and exceeded published guideline values indicating possible adverse ecological effects. The contaminants of greatest concern in the canals included arsenic, copper, polyaromatic hydrocarbons, polychlorinated biphenyls, and several banned, persistent pesticides (DDT, dieldrin, endrin, and chlordane). Benthic macroinvertebrate assemblages in canals were severely degraded; mean species richness, abundance, and biomass were 1/7, 1/10, and 1/20, respectively, of the values for the remaining coastal bays. A single pollution-tolerant polychaete species (Streblospio benedicti) comprised approximately three-fourths (70%) of the community in the canals. Deep (>1 m) and muddy canals were in poorer condition than shallow and sandy ones.