Lake Alexandrina is a Wildlife Refuge and a delight to a fisherman, well documented for its brown and rainbow trout and salmon.

[2] The lake catchment is biologically rich, with 45 species of birds, which include the Australasian crested grebe, shoveler and scaup.

[12] In December 2021, the Department of Conservation reported that over 60 breeding pairs of Australasian crested grebes had established nests in the first 50 metres of the outlet stream, and urged holidaymakers to keep their distance, to avoid disturbing the birds.

[16] The threats to the lake waters that were identified in the 1980s were the regular occurrence of algal (Anabaena) blooms, which were a result of high nutrient levels of phosphorus, survival of wildlife, and recreational fishery.

It was assessed by measurements that nearly 50% of the phosphorus was contributed by groundwater, with 32% from surface water inflows and only 3–9% from hut settlements.

[2] In order to take adequate remedial measures to check the inflow of nutrients into the lake, which had raised the phosphorus content in the lake waters to unacceptable levels, in 1984, the "Lake Alexandrina Steering Committee" was set up which identified the problem areas causing deterioration of water quality as due to phosphorus as also from the hut settlements at the outlet and south end, and from agricultural sources.

Consequent to their study of recorded high total phosphorus levels causing the blooms and creating threats to wildlife and the recreational fisheries, the Commission prescribed interim management guidelines such as: Total cessation of aerial top dressing within 500 metres (1,600 ft) of the eastern shore and 800 metres (2,600 ft) of the western shore and around the flow sources into the lake; restrictions on fertiliser use for agriculture; access to streams for spawning activities and to establish a "deer fence" on the northern end of the wetland; stop all activities related to cultivation on the shores of the lake; stop building of the hut settlements around the lake; install individual household effluent storage or septic tanks; and diversion of sewage outside the catchment.

Progressively implemented since 1985, the redeeming feature of these actions is that the heavy algal blooms of the 1980s are now infrequent and limited to a frequency occurrence of once in three years.