A combination of hydrological and hydrodynamic modelling can be applied to understand the hydrology and key water balance components of lakes and lagoons. In this research, the Soil and Water Assessment Tool (SWAT) model and the QGIS Water Ecosystems Tool (QWET) were applied for the Mar Menor coastal lagoon and its watershed known as Campo de Cartagena. First, the SWAT model was calibrated and validated based on remote sensing evapotranspiration data. Results showed an acceptable performance of the SWAT model in both calibration (R2 = 0.63, NSE = 0.62, PBIAS = 2.91%) and validation (R2 = 0.68, NSE = 0.68, PBIAS = 2.47%) periods on a monthly basis. The SWAT simulated streamflow was fed into the QWET model to simulate the water balance of the lagoon. The hydrodynamic model performance was evaluated based on a comparison between simulated and observed water temperatures and also the model estimated evaporation. Simulated daily temperatures showed a good agreement with observed data by capturing the timing and inter-annual variations, with an NSE of 0.98, and a BIAS of 2.7%. Our water balance estimation, using the reference period 2003-2019, yields a mean annual rainfall over the lake of 301 mm and a mean annual evaporation of 1325 mm. The average surface runoff and groundwater discharge to the lagoon are 49 hm3/year and 11 hm3/year, respectively. Extreme storm events cause annual surface runoff to vary between 8 hm3/year and 202 hm3/year. The water balance was closed with the water exchange with the Mediterranean Sea, resulting in an overall positive flow from the Mediterranean Sea of 82 hm3/year. Our study showed that during summer months, in particular, there is considerable inflow of Mediterranean water to the lagoon, whereas for some autumn and winter months (November, December and January) there is a net outflow from the lagoon to the Mediterranean. This novel approach by combining the SWAT hydrological model and QWET hydrodynamic model complex provides a useful tool for understanding the hydrology of the lagoon and may also play a role for decision makers when developing strategies for mitigating eutrophication.