This study was conducted to understand the effect of coastal shrimp farming on water quality properties in the surrounding area of a semi-intensive culture system in Mafia Island, Tanzania. Monthly water samples were collected from six stations located within culture ponds, inlet creek and outlet/effluent creek, from June, 2008 to May, 2009, and November, 2009 to March, 2010. The samples were used for the analysis of the selected water quality parameters following the standard procedures. The data obtained was analyzed using one way ANOVA and significant differences accepted at p ≤ 0.05. Post Hoc Turkeys’ test was used to determine the specific stations which were sources of differences. Correlation co-efficient (r) was performed to establish the relation between independent and dependent parameters. Results showed that DO, salinity, NH4-N, NO2-N and PO4-P were significantly (p<0.05) higher in sampling stations inside culture ponds. NO3-N had significantly (p<0.05) higher mean values at the stations along the effluent creek. No significant differences (p>0.05) were recorded between the stations in terms of temperature, EC and chlorophyll-a. High positive correlations (r = 0.646–0.927) between EC and dissolved nutrients is an indication of common origin of these parameters that is, mineralization of organic materials. In general, concentrations of all analysed parameters were within the desirable and acceptable limits for marine ecosystems. To sustain the present conditions it is being recommended to adopt better farm husbandry as well as treating effluent materials before discharging them to the marine water medium. The study would provide essential information on which further studies can be carried out to evaluate the environmental impacts of marine aquaculture and, supports protection and decision making for sustainable development in the coastal areas.