<p>In numerous developing nations, untreated or poorly treated wastewater poses a major threat to ecosystems, significantly harming local biodiversity. Ensuring sustainable water resources that protect human health and ecosystems requires considering diverse factors and indicators simultaneously. Evaluating water quality (WQ) and river water environmental capacity (RWEC) is essential for determining the required level of wastewater treatment and the river channel’s receiving capacity. This study aims to investigate the impact of wastewater treatment on WQ and RWEC within a rapidly urbanizing watershed that suffers from inadequate planning. Eco-hydrodynamic models are applied to assess WQ and RWEC under the influence of pollution sources. Three characteristic pollutants in the area are considered: BOD, Nitrate, and Phosphate. Data on the sources of pollution, including the flow and quality of untreated and poorly treated wastewater, are collected. Additionally, meteorological and hydrological factors, as well as water quality monitoring data in the study area, are used. Three scenarios are considered based on the actual discharge in the area: the current scenario, the poorly treated scenario, and the scenario with treatment at permissible levels by enterprises. The results show that currently, the Nghèn River, the subject of the study, is negatively affected by pollution sources, with 54.17% of the reach not meeting BOD standard and 25% of the reach not meeting Phosphate standard. Meanwhile, the river’s waste assimilation capacity is significantly impacted by current pollution sources. Specifically, RWEC at 75% of the reach can no longer assimilate BOD, 50% for Nitrate, and 75% for Phosphate. These figures increase under the poorly treated scenario. To maintain environmental health and biodiversity, strict sanctions must be imposed on enterprises that do not comply with wastewater treatment regulations.</p>