Investigations were conducted to evaluate the contamination level of the Grand Canal and the adjacent hydrogeological systems near Hangzhou, China. Samples of canal water, groundwater, canal sediments, soil and sediments of water-bearing strata were collected to characterize environmental pollution attributable to the development of industry, agriculture and urban areas. The chemical features of metals from the study area, including Cu, Pb, Zn, Cr, Mn, Cd, Hg and As were analyzed. Discharge of wastewater, sewage and solid materials polluted the water and shallow sediments in the canal. The canal flow transported the contaminants from source areas downstream. Because of the pollution, the canal water, which was suitable for drinking, contained low oxygen values and was not able to support any aquatic animal life. Low-permeability strata and high groundwater levels prevented direct transport of contaminants to the adjacent groundwater systems on both sides of the canal. However, utilization of the canal water for irrigation and the mud for fertilizer by local farmers resulted in the spread of contaminants on both sides of the canal. Consequently, the soil and the groundwater in the area were also contaminated by heavy metals. The polluted environment in the study area was considered a leading factor in lowering the concentration of the bacteriolytic enzyme in saliva of school children.