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Goal, Scope and Background: Over the last decade Greece has become a leading country in the EU as concerns the cage farming of seabream and seabass. A strong debate has risen, however, about the environmental impacts of aquacultures in the coastal areas. The present paper deals with this problem and it is based on measurements of physico-chemical parameters in the water column, particulate matter and sediments in the area of Astakos Gulf, a coastal embayment in western Greece where three big fish farms are currently operating., Methods: Water samples were collected by using Hydro-Bios sampling bottles, whereas a prototype sediment trap was installed under a fish cage for the collection of particulate matter. Temperature, dissolved oxygen, pH and salinity were measured in situ using portable equipment. Nutrients were determined by standard spectrophotometric methods. Trace metals were determined by Atomic Absorption Spectrometry. Dissolved organic carbon was determined by a Shimadzu 5000A carbon analyzer, whereas organic carbon in sediments was determined titrimetrically., Results and Discussion: No clear eutrophication incidents have been identified, although the water column near the fish farms was enriched in nutrients and organic carbon. A sludge 'blanket' covers considerable parts of the seabed and is enriched in colloidal organic carbon and trace metals (Cd, Cu, Fe and Zn) that come from unused fish food. The biodegradation of this sludge leads to the development of anoxic conditions followed by the formation of undesirable gases, precipitation or remobilization of metals and the extinction of benthic fauna., Conclusion: The operation of fish farms at the coastal area of Astakos Gulf, and probably in similar Mediterranean gulfs, affects the marine environment, particularly in the vicinity of the cages. The most significant influence concerns the near-bottom water layer. The environmental impacts depend on the amount of food given to fishes, the mode of feeding, the fish density in cages, the annual production and the years of unit operation. The hydrology and the geomorphology of the area are also critical factors for its environmental quality., Recommendation and Outlook: The success of the fish-farming sector in the Mediterranean is accompanied by environmental and, in some extents, by social and marketing problems. These problems, derived from the rapid development of fish farming, can be solved only through an integrated management, using methods such as environmental impact assessment, risk assessment, economic evaluation, vulnerability assessments, resource accounting, cost-benefit analysis and outcome-based monitoring.