This study reports the longitudinal distribution of sediment properties, including inorganic and organic contaminants, and the structure of the benthic community in Obidos lagoon, a coastal system permanently connected to the sea and with negligible freshwater sources. Sediments from the upper to central lagoon consist of fine particles (91%) and from the lower lagoon of sands (94%). Chemical composition is strongly correlated to the percentage of fine particles. Contamination is relatively low in those sediments suggesting the effect of diffuse sources. The increase in organic matter content from down- to upstream areas was associated with the dominance of opportunistic species, while sensitive and indifferent species to organic enrichment were mainly associated to the clean sandy downstream area. The marine biotic index (AMBI) was suitable for the discrimination of the biological and environmental gradients in the Obidos lagoon and was highly related with the gradient of organic matter content in this system.