The Mar Menor is the largest coastal lagoon in the Western Mediterranean and it is an important site for wintering and breeding waterfowl. During recent decades several hydrological and land-use changes in the watershed have increasingly threatened the conservation of the lagoon due to the development of urban areas, tourism and agriculture. A dynamic system model has been developed at the watershed scale to estimate the annual load of nutrients reaching the Mar Menor-associated wetlands. At present, mean annual loadings of approximately 2000 tonnes of nitrogen and 60 tonnes of phosphorus are delivered to the lagoon. The simulation results emphasize the role of heavy rainfall events and floods in the formation of the total nutrient load. The composition of aquatic bird communities has been used to assess the nutrient impact on the lagoon food-web. The Great Crested Grebe is apparently the species most closely dependant on local trophic conditions. The related Black-necked Grebe, that dominates the waterbird plays a similar role, but its more opportunistic response to changes in food community of the lagoon resources, reduces its indicator value. The abundance of the two species of grebes seems to closely track the nitrogen load curve, especially during the first phase of enrichment, suggesting the existence of a direct trophic relationship. In the following phase, jellyfish blooms coincide with the bird decline. Jellyfishes seem to have a buffering effect towards nutrients, determining a bottom up limitation to other trophic compartments. In recent years, this buffering capacity has probably been overloaded, favouring the growth of new food resources available to the grebes. Unlike grebes, Mergus serrator, a typical piscivorous bird, does not seem to be affected positively by eutrophication since it shows a long-term stability in numbers or even a slight decline. Since this suspected decline would parallel a Iona-term reduction of fish catches, the species could be regarded as a potential indicator of habitat deterioration.