Lake Peipsi is a eutrophic and biologically highly productive lake. The major threat to water quality in the lake is eutrophication, which is caused by the high nutrient load. Agriculture is the main source of nutrient water pollution and the oil-shale industry has big influence to the outlet from Lake Peipsi – the Narva River. One part of this pollution is coming through Rannapungerja River directly into Lake Peipsi.
The lake is most important as a resource for fisheries and recreation. Peipsi is one of the best lakes in Europe for commercial fishing, with a total catch of 8,000 - 11,000 tons/year. The fish stock in Lake Peipsi is one of the richest in Europe. Besides eutrophication unregulated fishing in the lake is one of the most critical environmental issues for the Peipsi watershed.