Impervious surfaces have for many years been recognized as an indicator of the intensity of the urban environment and, with the advent of urban sprawl, they have become a key issue in habitat health. In addition to the direct impacts to water quality, impervious surfaces fragment open space and habitat and are therefore a primary land use indicator of both water quality and ecological degradation. This paper develops an understanding of the land use planning implications of the interaction of impervious surfaces, water quality and the spatial form those surfaces take in a watershed. In order to clarify these relationships, the analysis relies on two levels of information: 1) a review of the literature to determine the extent to which the density and placement of impervious surfaces has been found to affect water quality; and 2) modeling three types of residential developments to determine their effects on impervious surface ratios as well as their effect on both habitat fragmentation and water quality.