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This article introduces a practical method to investigate thermal pollution in coastal water from satellite data. The intensity and distribution areas of thermal pollution by the heated effluent discharge from the nuclear power plant on Daya Bay, southern China were investigated by using Landsat-5 Thematic Mapper (TM) thermal band data from 1994 to 2001. A local algorithm was developed, based on sea-truth data of water surface temperature measured when the satellite passed over the study area. The local algorithm was then applied to estimate water temperature from TM data. It shows that the remote sensing technique provides an effective means to quantitatively monitor the intensity of thermal pollution and to retrieve a very detailed distribution pattern of thermal pollution in coastal waters. The remotely-sensed results of the thermal pollution can be used for environmental management of coastal waters.