Construction and operation of the Three Gorges Dam (TGD) has significantly altered the downstream hydrological regime along the Yangtze River, which has in turn affected the environment, biodiversity and morphological configuration, and human development. The ecological and environmental systems of the middle and lower Yangtze River have been affected adversely, with the ecosystems of Poyang Lake and its deltas being among the most damaged. Besides posing a potential threat to the survival of migrant birds and aquatic species, operation of the TGD has also affected the human population, particularly with respect to water and food security. Though the above mentioned effects have been studied in previous papers, a comprehensive discussion has never been conducted. This paper provides the first ever summary of the impacts of the TGD on the downstream reaches of the Yangtze River. The costs and benefits identified provide a constructive reference that can be used in decision-making for sustainable development of water resources in other nations, especially those in the developing world.