The present study represents a comprehensive monthly investigation at the polluted sector in the Ismailia Canal facing chemicals and fertilizers factory at Abu-Zabal, compared with unpolluted sector at El-Mezallat region. The changes in algal standing crop and physico-chemical characteristics of Ismailia Canal water at the two sectors were studied from September, 1996 to August, 1997. The standing crop showed distinct seasonal variations. The dominance of algal groups was arranged in the following descending classes: Chlorophyceae > Bacillariophyceae > Cyanophyceae > Dinophyceae. The number of species recovered in the polluted sector was lower but always higher in the total algal count than in the control sector. At polutted site, the values of pollution index ranged between 0.016 and 0.056. On the other hand levels of eutrophication index ranged from 0.70 to 2.07. These data indicate that Ismailia Canal water facing chemicals and fertilizers factory at Abu-Zabal is oligotrophic to mesotrophic with heavy inorganic pollution.