EPA`s WASP/EUTRO5 modeling framework was applied to assess water quality problems of Maryland Coastal Bays, which were developing rapidly in areas adjacent to Ocean City and are an area of concern due to the potential effects of such development and resulting landuse changes on environmental quality. The model was utilized to determine subwatersheds that most impact water quality conditions in the bays and contribute to the eutrophication problem in receiving waters. Model results were used to develop nutrient budgets for the study area. The analysis of the results shows that nutrient release from the sediment is the single most important nutrient source. Further, projected landuse was used in the model to determine water quality impacts from the future land use changes in 2005. According to model simulations, only a small reduction in total chlorophyll a from the present condition was expected due to the reduction of nutrient loads.