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This article assesses the ecological and economic impacts of land reclamation and dredging through consulting recent environmental impact assessment reports. Geographic features of Bahrain during 1963–2008 are produced using Geographical Information System. Extensive but inexpensive shallow coastal areas and tidal flats have been reclaimed particularly from 1997 to 2007 at a high rate of 21km²/year. Formal records show the increase in the original land mass by the year 2008 to be 91km². An estimated total cumulative loss of major habitats resulting from 10 reclamation projects was around 153.58km². Also much larger scale impacts should be considered resulting from the borrow areas used for the extraction of sand or infill materials. A number of key habitats and species are affected in the vicinity of these projects. The study attempts to assign a monetary value to the marine ecosystem functions. There is a need for efficient coastal zone management to regulate a sustainable use of the marine resources.