Algal bioassays to determine algal growth potential of waters and nutrient limitation were conducted using a standard test organism Selenastrum capricornutum and native phytoplankton from the sites sampled. The study site was the river-reservoir system of the Río Grande de Morelia located on the Mexican Central Plateau. The US Environmental Protection Agency’s protocol for algal bioassays was followed. In this river-reservoir system, urban and industrial impacts increase downstream. The bioassays showed that water from sites impacted by rural settlements has a low algal growth potential and that nitrogen limits growth. Sites located at urban and industrial settlements have a high algal growth potential and phosphorus limits algae growth.