Water systems in Upper Egypt appear to be vulnerable for Egyptians uses and abuses. Recognition of the ever increasing pressure on those resources and the inevitable conflicts of water utility always require promotion of strategies for better environmental management of this valuable resource. WHO has reported that about 40 thousand people worldwide are dying daily due to consumption of polluted water. Hence, it was thought imperative to assess the water quality and pollution status of aquatic habitats in Upper Egypt. Irrigation and drainage canals have an important role in controlling the water balance, for irrigation of agricultural lands and discharge from the cultivated soils. They may be subjected to anthropogenic impact that lead to perceptible changes in their regime particularly in the drainage canals. In such habitats, planktonic algae are sensitive to the dramatic fluctuations of water quality, and are therefore could be regarded as predictors for monitoring environmental conditions. Obvious differences were observed between the irrigation and drainage canals in water quality and phytoplankton abundance as well as its community structure. For instance, the species diversities in the irrigation canals were relatively higher than those in the drainage canals. Furthermore, some euglenoid and cyanoprokaryotic phytoplankton appeared in the drainage canals and completely disappeared in the irrigation canals. These observations provide evidence for possible use of phytoplankton to assess water quality.