A sector of the river Nile at Minia governorate was studied for water quality estimation. Physicochemical and algal investigations were performed in the period May 2003- April 2004. The effect of discharge from a drainage stream that connects with the river was reflected on water chemistry and algal communities of the Nile. Receiving pollutants from the drainage stream affected the Nile water that became increased in electrical conductivity, COD, total alkalinity, NO₃^-, PO₄^3-, Cl^-, Si₂O₃^2-, Ca²⁺, Mg²⁺, Na⁺, and K⁺.Other parameters were decreased namely; visibility, dissolved oxygen and oxygen saturation. During the period of study, 167 algal taxa were recorded, 22.2% of which were cyanophytes, 3.6% euglenophytes, 27.5% chlorophytes and 46.7 %were bacillariophytes. Being subjected to pollution the river Nile showed an increased diversity of species whereas the polluted drain accounted for the least species diversity, composed mainly of pollution-tolerant taxa. Size of algal populations was also increased as a result of discharge of pollutants into the river whereas the drainage stream showed the least dense algal populations. The drainage stream was characterized by the prevalence of the saprophilic Euglena spp. and cyanophytes such as Oscillatoria amoena, O. chlorina, O. limosa, O. subbrevis, O. subtilissima and Phormidium mucosum.Most of these species were also recorded in the river Nile indicting its contamination with organic matter and mineral salts.Diatom species with high affinity to organic matter and increased salt content were also detected in the river such as Amphora inariesis, Gomphonema clevei, Navicula atomus, N. cuspidate, N. pygmaea, N. phyllepta, Nitzschia linearis, N. palea, N. umbonata, and Pleurosigma salinarum.