As the economic and financial center of China, Shanghai has experienced an extensive urban expansion since the early 1980s, with an attendant cost in environmental degradation. We use an integrated pollution index to study the temporal variations of surface water quality in urban, suburban and rural areas between 1982 and 2005. Data on monitored cross-sections were collected from the Shanghai Environmental Monitoring Center. The results indicated that the spatial pattern of surface water quality was determined by the level of urbanization. Surface water qualities in urban and suburban areas were improved by strengthening the environmental policies and management, but were worsening in rural areas. The relationship between economic growth and surface water quality in Shanghai showed an inversed-U-shaped curve, which reflected a similar pattern in most developed countries. This research suggests that decision makers and city officials should be more aware of the recent pollution increases in Shanghai.