The objectives of the article are: to assess spatio-temporal evolution of eutrophication and water quality of the Turawa dam reservoir, located in south-western Poland on the Mała Panew River; to identify location and relationship between potential sources of physicochemical pollution related to the progressing process of eutrophication; and to determine trophic status and water quality indices of the selected research object. The analysis (Mann–Whitney U test, PCA, HCA, Spearman correlation matrix) showed a high susceptibility of the reservoir to eutrophication processes, especially due to the influence of dangerous loads of compounds emerging from areas with high tourist intensity and pollutants flowing from the Mała Panew River. The parameters deteriorating the ecological status were TP, DO, BOD5, and COD. Considering the cumulative results of water quality indices for the period 1998–2020, the average water quality was in classes II or III. A noticeable deterioration appeared in water quality for the years 2016–2020, which proves the progressing eutrophication in the Turawa reservoir. In 1998–2020, the reservoir was classified as eutrophic or mesoeutrophic based on the calculated three trophic status indices. This article would help in developing a strategy for dealing with water blooms, a reliable system for monitoring pressures causing eutrophication, and optimal technologies for the reconstruction of multifunctional reservoirs.