Growth of algae and bacteria in the ocean — whether it is phytoplankton, leafy macroalgae or turf algae — is often limited by the amount of nutrients available in the water. The nutrients that limit growth of marine plants are most often nitrogen, including inorganic nitrogen (e.g., nitrates and ammonium), organic nitrogen (e.g., urea), and inorganic phosphorus (e.g., phosphate), and sometimes iron in various forms. Wastewater discharge often has high concentrations of these nutrients. At low levels, these extra nutrients can enrich food webs, but at high levels, which occur in many places, algal blooms and other impacts have dire consequences for marine life.

As algae outcompete grasses and corals for light, the direct impact of these algal blooms is overgrowth and death of many habitats, including seagrass beds and coral reefs. The indirect impacts are more varied, but just as lethal. As massive amounts of algae naturally die back and sink to the bottom, large dead zones lacking oxygen can form. These dead zones destroy habitat in shallow and deep water, in temperate and tropical regions, on coral and oyster reefs; in kelp forests and seagrass beds, and over extensive areas of coastal plains — in some cases, the width of these areas stretching for kilometers.

Nutrient pollution from wastewater not only increases algal growth, but also shifts the composition of algae. On coral reefs, it shifts the dominant algae from slow-growing, coralline algae, to leafy, fast-growing algae. In the water column, the consequences of species swaps have been shown to be particularly toxic, as increased nutrients shift the dominant phytoplankton from ones palatable to most filter feeders to others that are loaded with chemical defenses. These blooms of toxic algae, called harmful algal blooms (HABs), can create extensive areas of surface waters that have lethal concentrations of plant chemicals. HABs can kill most macro-marine life, including shellfish, finfish, marine mammals, and seagrasses; sometimes, causing massive fish kills. When HABs occur near beaches, they can make people sick and result in beach closures. HABs have been found to contribute to illnesses such as respiratory and neurodegenerative diseases in people. Nutrients can also fuel growth of pathogenic algae that can attack marine life, including corals and fish. In the case of coral, for instance, nutrients are known to increase prevalence of coral disease, which then increases susceptibility to bleaching.

Besides causing decreased growth of ocean habitats by fueling algal growth and algal species changes, increased nutrients, if concentrations of ammonium levels are high enough, can directly decrease growth of habitat-forming grasses. For corals, high levels of nitrate and ammonium are toxic and can slow growth, or kill coral polyps directly.