Discharge of untreated sewage into a stream can be disastrous to the natural balance. Oxygen can be depleted. Rivers can “die”. Solids settle to the bottom, where they can create anaerobic conditions: lakes stink.
Even treated sewage can be a problem, if it contains too many nutrients: this may lead to eutrophication. This happens when nutrients stimulate the excessive growth of aquatic plants, especially algae (algae bloom). This leads to serious problems, particularly in summer, when during night time the algae use up all oxygen in the water, which can result in the entire body of water keeling over and dying virtually overnight.
Use of water downstream for human consumption, as well as recreational use can cause disease, if it is not treated properly.