The Ismailia Canal is one of Egypt's most crucial irrigation and drinking water sources. However, it suffers from many sources of pollution that can damage and impair the canal's water quality. The development and use of biotic indices represent an integrative water quality assessment technique, complementing chemical indices that facilitate the reading of environmental changes. In this study, macroinvertebrates were collected from 13 sampling sites, covering all habitats along the canal. The Biological Monitoring Working Party (BMWP-ASPT) and the Nile Biotic Pollution Index (NBPI-ASPT) were used to evaluate water quality, and diversity indices were also applied. Twenty-seven taxa belonging to three major groups—i.e., Mollusca, Annelida, and Arthropoda were identified in the Ismailia Canal. The most abundant taxon was Bellamya unicolor, with 37.3% of the whole community in summer and 41% in winter. The results of BMWP-ASPT and NBPI-ASPT indicated a poor class (≤ 4.9 scores) in the winter season at all canal sites. The same results were obtained in summer, except at sites M11 and M12, where the water quality was good (≥ 6). The richness index in the study area was 1, while the evenness index was closer to 1 in the Ismailia Canal, which indicated good water quality. The canonical correspondence analysis (CCA) showed that K significantly impacted the distribution of macrobenthic organisms (P-value = 0.03 and F-ratio = 1.75). K, BOD, and TDS established strong relations with the distribution of Theodoxus niloticus and Bulinus truncates. Dytiscidae larvae, Baetis nymph, and Limnodrilus udekedmianus were closely associated with COD. According to the results of BMWP-ASPT and NBPI-ASPT, it was concluded that the Ismailia Canal generally suffers from pollution and is categorized as having a bad water quality class.