Deterioration of the Izmit Bay ecosystem, mainly caused by heavy industrialization and urbanization, has significantly impaired its beneficial use and resulted in the surrounding coastal zone losing its attractiveness for the inhabitants. An integrated coastal zone management approach has become an important requirement of future development plans to protect this fragile bay ecosystem. One of the main indicators of deterioration of the Izmit Bay coastal system is the decreasing water quality resulting from increased nutrient loads from the surrounding land.The consensus during the initial stakeholder meeting confirmed the widespread awareness of this phenomenon and "improvement of water quality in Izmit Bay" was determined as the main policy issue at stake. Public perception of and satisfaction with water quality were measured by a willingness to pay (WTP) survey. The WTP for improved water quality was analyzed using the contingent valuation method. According to the questionnaire survey, 55% of the participants are willing to pay to increase the water quality. Impact of water quality on real-estate values was evaluated by hedonic pricing method, which is suitable for estimating direct and indirect use values of water resources. These results were used in a simulation model to assess coupled ecosystem, social, and economic system functioning of the Izmit Bay in response to various scenarios, and thus, to permit the necessary actions to be taken proactively. Two scenario simulations, for which domestic and runoff nitrogen loads are reduced independently, showed that hypothetical domestic wastewater treatment resulted in an improvement in simulated water transparency. The results suggest that domestic wastewater treatment should be a first priority for local administrations.