In Mediterranean regions, reservoirs play a crucial role in securing urban water supply. Despite the large number of reservoirs in Portugal, their management still largely follows their primary designated use—public supply, irrigation, or hydropower—which limits progress towards achieving good ecological potential. This highlights the need for integrated, ecosystem-based management approaches. The Serra Serrada reservoir (41.886° N, –6.766° W), which supplies the city of Bragança (NE Portugal), exemplifies the importance of management strategies that stabilise water-level fluctuations and support good ecological potential in line with the Water Framework Directive. With a total storage capacity of 1,680,000 m³ and located within a Key Biodiversity Area, this reservoir was assessed through an environmental diagnosis conducted at five geographic levels: territory, catchment, reservoir surroundings, reservoir, and downstream territory. Field surveys, bibliographic data, and stakeholder consultations supported the assessment of pressures and the definition of mitigation measures. Proposed actions include the restoration of wetlands and riparian vegetation and the promotion of water efficiency in public buildings. Studies carried out in Bragança—covering schools, the municipal market, student residences, and the municipal swimming pool complex—report an annual water consumption of 324,239.62 m³. Estimated savings range from 12.4% to 75%, depending on building type and the efficiency measures applied. Improving water efficiency in these facilities represents a priority action, as it directly contributes to sustainable urban water use. The implementation of rainwater harvesting systems and nature-based solutions, such as green roofs, can further enhance water sustainability. Such measures in the urban water cycle can indirectly support higher and more stable water levels, improved water quality, and the overall ecological integrity of the Serra Serrada reservoir.