Urbanization is a major cause of loss of coastal wetlands. Urbanization also exerts significant influences on the structure and function of coastal wetlands, mainly through modifying the hydrological and sedimentation regimes, and the dynamics of nutrients and chemical pollutants. Natural coastal wetlands are characterized by a hydrological regime comprising concentrated flow to estuarine and coastal areas during flood events, and diffused discharge into groundwater and waterways during the non-flood periods. Urbanization, through increasing the amount of impervious areas in the catchment, results in a replacement of this regime by concentrating rain run-off. Quality of run-off is also modified in urban areas, as loadings of sediment, nutrients and pollutants are increased in urban areas. While the effects of such modifications on the biota and the physical environment have been relatively well studied, there is to date little information on their impact at the ecosystem level. Methodological issues, such as a lack of sufficient replication at the whole-habitat level, the lack of suitable indices of urbanization and tools for assessing hydrological connectivity, have to be overcome to allow the effects of urbanization to be assessed at the ecosystem level. A functional model is presented to demonstrate the impact of urbanization on coastal wetland structure and function.