The spatial and temporal distribution of modern diatom assemblages in surface sediments, on the most dominant macrophytes, and in the water column at 96 locations in Florida Bay, Biscayne Bay and adjacent regions were examined in order to develop paleoenvironmental prediction models for this region. Analyses of these distributions revealed distinct temporal and spatial differences in assemblages among the locations. The differences among diatom assemblages living on subaquatic vegetation and sediments, and in the water column were significant. Because concentrations of salts, total phosphorus (WTP), total nitrogen (WTN) and total organic carbon (WTOC) are partly controlled by water management in this region, diatom-based models were produced to assess these variables. Discriminant function analyses showed that diatoms can also be successfully used to reconstruct changes in the abundance of diatom assemblages typical for different habitats and life habits. To interpret paleoenvironmental changes, changes in salinity, WTN, WTP and WTOC were inferred from diatoms preserved in sediment cores collected along environmental gradients in Florida Bay (4 cores) and from nearshore and offshore locations in Biscayne Bay (3 cores). The reconstructions showed that water quality conditions in these estuaries have been fluctuating for thousands of years due to natural processes and sea-level changes, but almost synchronized shifts in diatom assemblages occurred in the mid-1960’s at all coring locations (except Ninemile Bank and Bob Allen Bank in Florida Bay). These alterations correspond to the major construction of numerous water management structures on the mainland. Additionally, all the coring sites (except Card Sound Bank, Biscayne Bay and Trout Cove, Florida Bay) showed decreasing salinity and fluctuations in nutrient levels in the last two decades that correspond to increased rainfall in the 1990’s and increased freshwater discharge to the bays, a result of increased freshwater deliveries to the Everglades by South Florida Water Management District in the 1980’s and 1990’s. Reconstructions of the abundance of diatom assemblages typical for different habitats and life habits revealed multiple sources of diatoms to the coring locations and that epiphytic assemblages in both bays increased in abundance since the early 1990’s.