Present study investigated the relationship between plankton communities and environmental variables in five different locations of the Kotmale Reservoir during the period of June 2008 to May 2011. A total of 123 plankton species were recorded with 85 species of phytoplankton and 38 species of zooplankton. The relative abundance data indicate that Aulacoseira granulata (31.06%), Botryococcus braunii (12.34%) and Microcystis sp.(11.93%) were the dominant phytoplankton species while Acanthocystis turfacea (52.22%) was the dominant zooplankton species. Staurastrum cingulum was the dominant species in sites where the immediate catchment is covered with reservation forest with no significant inflow streams. Aulacoseira granulata, Fragellaria capucina and Navicula sp. were abundant in locations where the highest total phosphorus (TP) values were recorded. The main inflow streams, Puna Oya and Pundalu Oya appear to bring nutrient rich waters from its catchment with dense tea estates, agricultural lands, industries and villages. Microcystis sp. was abundant in locations where the highest values for TP, dissolved phosphorus (DP), ammonia, conductivity and turbidity were recorded. Botryococcus braunii was dominant in the location where Puna Oya reaches the reservoir. Staurastrumlepta canthum was abundant in the location located closer to the dam where the water body mostly contains limnetic characteristics. Among the zooplankton, cladocera species were abundant in sites where Staurastrum cingulum was identified. Rotifers and ciliate protozoans were identified closer to the dam and at the sites with high dominance of Microcystis sp. Accordingly, it was apparent that the distribution and abundance of these plankton species depend on the prevailing environmental conditions which ultimately show their ability to use as environmental indicators.