Many studies report the relationship between coliform indicator bacteria levels and the overall quality of environmental water for public use. This study, an outgrowth of a long-term watermonitoring program within the upper Appomattox River (Virginia) watershed, employs a zebrafish model to examine the relationship between impaired stream water and aquatic vertebrate development. We report results that suggest an expansion of the indicator bacteria concept, showing a possible relationship between waters containing high levels of the indicator bacterium, Escherichia coli (E. coli), with developmental defects upon zebrafish embryos. These effects are not directly attributable to bacterial presence, as filtered test waters void of bacteria produce the same results in embryos, indicating these developmental defects are due to the presence of other toxins or contaminants. Fish embryos exposed to the test waters show reduced survivorship and altered brain and heart development. Furthermore, fish surviving to adulthood exhibit altered gonads and skewed sex ratios. We suggest that this broadly focused approach examining the complex interactions (biotic and abiotic) within raw water sources could be used in conjunction with traditional chemical assays and/or dose-response studies on vertebrate models for a more complete analysis of stream water quality conditions.