To assess the effects of tidal energy extraction on water quality in a simplified estuarine system, which consists of a tidal bay connected to the coastal ocean through a narrow channel where energy is extracted using in-stream tidal turbines, a three-dimensional coastal ocean model with built-in tidal turbine and water quality modules was applied. The effects of tidal energy extraction on water quality were examined for two energy extraction scenarios as compared with the baseline condition. It was found, in general, that the environmental impacts associated with energy extraction depend highly on the amount of power extracted from the system. Model results indicate that, as a result of energy extraction from the channel, the competition between decreased flushing rates in the bay and increased vertical mixing in the channel directly affects water quality responses in the bay. The decreased flushing rates tend to cause a stronger but negative impact on water quality. On the other hand, the increased vertical mixing could lead to higher bottom dissolved oxygen at times. As the first modeling effort directly aimed at examining the impacts of tidal energy extraction on estuarine water quality, this study demonstrates that numerical models can serve as a very useful tool for this purpose. However, more careful efforts are warranted to address system-specific environmental issues in real-world, complex estuarine systems.