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Urban lakes play a major role in the socio-cultural and ecological sustainability of many cities, but are often under major development and pollution pressures. Urban decision makers are faced with a challenging task of identifying the causes of their decline and building plans for their conservation or rejuvenation. Powai Lake is a perfect example of an urban water body with historic, cultural, and ecological importance to the population of Metropolitan Mumbai, with local and regional authorities, including the Urban Development Department, Government of Maharashtra, working to identify methods for rejuvenating the Lake. In this context, characterization of pollution dynamics, hotspots, and extent is fundamental to the development of management plans and appropriate technologies for the remediation and rejuvenation of Powai Lake—the long-term goal of the present study. A two-year monitoring program at eight sampling locations on the Lake’s periphery, with the engagement of citizen scientists along with environmental researchers, revealed clear seasonal and spatial dynamics that allowed for the identification of pollution drivers and the development of a three-phase rejuvenation plan. The plan represents a novel and holistic approach that recognizes Powai Lake as a complex system with multiple drivers, and aims at ecological balance and sustainable delivery of ecosystem services.