The paper describes the fisheries and the fish resources in the Puttalam/Mundel estuarine system in the North Western province of Sri Lanka based on a survey carried out during the period Sept. 1990-Oct. 1992. The fishery in Puttalam Lagoon and Mundel Lake is multispecies and multigear, with around 1700 fishing crafts operating drift gillnets, bottom-set nets, trammel nets, dragnets and encircling nets targeting mainly the finfish and crustacean resources. In addition, various push-, pull- and dragnets are used extensively in shallow waters. Traps are also used in Puttalam Lagoon to target mud crabs. About 50% of the boats are equipped with outboard motors while the other 50% are traditional canoes and log rafts. Fishing is also very intensive in Dutch Canal, which connects Puttalam Lagoon and Mundel Lake. Fishing in the two water bodies is usually carried out throughout the year, but an increase in the fishing effort was observed during the south-west monsoon period (i.e. from May to September) when the open-sea was too rough for fishing. During this period the fishermen who normally operate in the open- sea shift their fishing operations to the estuarine system. The fishing effort by the motorized craft in the estuarine system has increased considerably during the past decade. Fibreglass Reinforced Plastic (FRP) boats with gillnets and trammel-nets made of nylon are the major craft/gear combination. The catch rates of these fisheries were estimated at 18 kg per operation for gillnets and 12 kg per operation for trammel nets. The total annual catch from the estuarine system was estimated at 5117 tonnes in 1991 and 2967 in 1992. The main reason for this drop was decreasing stocks and to some extent also the drop and change in fishing effort. Bioeconomic assessment of Puttalam Lagoon and Mundel Lake fisheries indicated the need to reduce the fishing effort by at least 20% and 50%, respectively, or to considerably increasing the mesh size of the nets. The use of dragnets in Mundel Lake and pull- nets and push-nets in Puttalam Lagoon seems to cause considerable environmental damage. Based on the results, management recommendations are presented.