Surface and underground waters in the nearby areas of Vijayawada Thermal Power Station have been analyzed for various parameters at specific intervals for a period of nine months at rationally chosen sample stations to assess the impact of discharges of effluents from Thermal Station. The Physicochemical parameters chosen for study are: pH, alkalinity, conductivity, DO, BOD, COD, solids (dissolved, suspending and total), hardness (Ca, Mg, and total), salinity (chloride content), nitrogen compounds (nitrites, nitrates & ammonia) and phosphate. Further thermal pollution is also monitored in the said period. It is observed that the discharges of effluents from the Thermal Power Station are contaminating the water bodies and some of the parameters are touching or crossing the maximum permissible limits. Stratification due to thermal pollution is also noted. The major flaw observed is that the effluents of thermal power station are being discharged into the upside stream of Krishna River (i.e. above Prakasham Barriage) and not down side stream and thereby, the impounding lake waters at the barrage are being contaminated. As the water are stagnated, the impurities are being accumulated especially non-degradable ions over period of time by the processes such as ‘bio-amplification’ and affect the quality of the lake waters and thereby, endangering the health and wealth of habitants of Five districts of Andhra Pradesh who are depending up these waters for their drinking and agricultural needs.