A comprehensive monitoring project (2006–2013) provided data on hydrology, hydromorphology, climatology, water physico-chemistry, sedimentology, macroinvertebrate community and fish diversity in the Kharaa River basin in northern Mongolia, thus enabling, for the first time, a detailed characterization of the stream landscapes. Surface waters were categorized into separate “water bodies” according to their identifiable abiotic and biocoenotic features, subsequently creating the smallest management sub-units within the river basin. Following the approach of the European Water Framework Directive (EC-WFD), in order to obtain a good ecological status (GES), four clearly identifiable water bodies in the Kharaa River main channel and seven water bodies consisting of the basin’s tributaries were delineated. The type-specific undisturbed reference state of various aquatic ecosystems was identified in the assessment and used to set standards for restoration goals. With regards to water quality and quantity, the upper reaches of the Kharaa River basin in the Khentii Mountains were classified as having a “good” ecological and chemical status. Compared with these natural reference conditions in the upper reaches, the initial risk assessment identified several “hot spot” regions with impacted water bodies in the middle and lower basin. Subsequently, the affected water bodies are at risk of not obtaining a level of good ecological and/or chemical status for surface waters. Finally, a matrix of cause-response relationships and stressor complexes has been developed and is presented here. The applicability of management approaches is discussed to better foster the development of a sustainable river basin management plan. The application of natural references states offers a sound scientific base to assess the impact of anthropogenic activities across the Kharaa River basin.