Since the river’s sustainability depend crucially on processes occurring in the watershed area and on connectivity with the land and the river network, effective river conservation needs to take a holistic watershed perspective which requires fundamental realignment of present institutions and governance structures. The Halda river ecosystem is not only a pride heritage of Chittagong, it is also a unique and only naturally occurring carp spawning area and source of pure gene bank of carps in Bangladesh. It is the only globally known tidal river supporting natural carp spawning ground with higher number of fish species than many other larger Asian rivers system. The river is also home to a number of globally endangered species including the Gangetic dolphin. Originating in Khagrachari hills, the river pass through the basin area covering about 1727 square kilometer or more and fed by more than 34 numbers of tributaries from Rangamati-Khagrachari hill ranges in the north and east, Sitakunda hill range in the west. Local population in the watershed area is dependent for their living and livelihood on the ecosystem services of the Halda river ecosystem. An approximate population of about 6.6 million lives in 92 unions covering 18 upazilas under 3 districts, Chittagong, Khagrachari and Rangamati, including urban areas with 5 municipalities and industrial area of metropolitan city of Chittagong who are dependent on the river for drinking water, agricultural production, fisheries and industrial production. Monitory valuation of the ecosystem service of the river (provisioning services) estimated to be approximately BDT 1753 million. This is however an underestimation since it excluded the value of regulatory and other ecosystem services. This unique heritage of the country is in peril due to unsustainable use of resources in the watershed area and the river itself. This article attempts to analyze the constraints of present Halda river resources management and suggests a watershed based governance model as precursor to ecosystem management for the long term sustainability of the Halda river ecosystem and its unique biodiversity. BADC, BWDB and LGED have made a number of engineering structures on the river to withdraw water for irrigation thus reducing the dry season river flow and obstructing movement of fish and other aquatic animals. Use of fertilizer and insecticides for the agriculture are also nonpoint sources of pollution to the river. The river also used for sand querying and provides navigation. The deep pools at the river’s oxbow-bends are sites for the spawning of carps. During the last hundred years about 11 oxbow bends have been canalized seriously reducing the spawning area. A number of brick kilns and poultry farms, tobacco farming in the catchment area and about 300 different industries in the Bayezid industrial estate are also discharging pollutants in the river deteriorating the water quality of the river. Erratic rainfall particularly low rainfall due to global climate change also causes high salinity in the river water detrimental to the spawning behaviour of the carps and supply of drinking water for human consumption in the urban and rural areas of the Halda river watershed.