The Lake of the Woods Watershed is a massive, binational watershed with the majority in Ontario, a small portion in Manitoba and the remainder in Minnesota.   Resource concerns in the U.S. portion include excessive wetness, wetland and woodland management, the short growing season, pasture management and surface water quality, with specific concerns for nutrient enrichment on Lake of the Woods itself. As with many areas of northern Minnesota, principal industries include forest product harvesting, forest product manufacturing, farming and tourism. Like its adjacent neighbors, the Lake of the Woods Watershed is characterized by extensive wetlands located on the Glacial Lake Agassiz lake bed. This once glaciated area is part of the Agassiz Lowlands Region.  Much of the land is not suited or is poorly suited to agricultural uses. Predominant land uses/land covers (U.S. stats) are open water (41%), wetlands (26%), forest (19%), row crops (6.5%), and grass/pasture/hay (5.3%). Development pressure is moderate throughout this watershed, with occasional lands being parceled out for timber production or recreational use. The Ontario portion of the Lake of the Woods watershed lies entirely within Fisheries Management Zone 5. Most of the area is undeveloped with logging being the major land use activity.  The largest community in the watershed is Kenora, Ontario and there are several smaller towns and numerous First Nation communities.

In Minnesota, intensive watershed monitoring was completed in 2013 and a watershed assessment was completed in 2015. The Monitoring and Assessment Report as well as the Stressor Identification report were completed in 2016 and are available at https://www.pca.state.mn.us/water/watersheds/lake-woods#overview.  The draft TMDL for Lake of the Woods is currently under review by USEPA.

For the U.S. portion of Lake of the Woods proper (i.e. just the lake, excluding the Northwest Angle), MPCA also has a major TMDL study underway to address impairment for nutrients and algae.  For more information on the study and public meetings to review the findings, please go to: http://lakeofthewoodsswcd.org/projects/lowtmdl.php.

In Ontario, water quality data are collected during the Broadscale Monitoring of lakes by Fisheries Management Zone (FMZ). FMZ 5, which includes the entire Lake of the Woods watershed, had water quality data collected from a random sample of lakes in 2010 and 2016. The watershed is entirely bedrock with the soil being primarily a thin layer of glacial till. Overall, water quality conditions are good. The City of Kenora and the Township of Sioux Narrows-Nestor Falls, as well as several First Nation communities and shoreline cottage developments are found within the watershed with some localized water quality impairment associated with human activity. Logging and related road construction is the major land development activity.  Algae blooms are a known issue on Lake of the Woods proper, at times severe.  The 2010 data show that average Secchi depth was 4.3 m, average total phosphorus was 8.1 ug/L and average pH was 7.2, but these values range widely in smaller bays.