Population and economic development are key drivers of water resource pollution. The population of Babati town increased from 44,000 in 2002 to93,108 inhabitants in 2012. It was projected the population would have reached 105,610 inhabitants by 2022.This study is an attempt to assess the implications of rapid population and spatial growth of Babati Town on Lake Babati and water resources. The study involved random sampling in the four villages of Hangoni, Himiti, BagaraZiwani, and GendiKuu. The data were collected through direct observations, questionnaires, and interviews with individual households around the Lake. TheGIS technology was applied in analysing the collected data including trends of the implication of population and spatial growth on Lake. The study revealed that there is rapid population growth inBabati Town including around Lake Babati whereas, Bagara ward which is located around the lake found with the highest populationconcentration;Migration (58%),andNatural increase(37%) are the major causes of population growth; Spatially the Town to grow around the lake Babati shore and along Babati-Arusha Road, BabatiSingida Road, and Babati-Dodoma-Road;Economic factors and migration (61.3% respondents) and increase of the value of the land at the Town center (28.7% respondents)have indicated are the main causes ofthe rapid urban sprawl around the lake basin;Deforestation and soil erosion, flooding, pollution, encroachment of lake areas, eutrophication and shrinking of the lake size are the major impacts of rapid urban sprawl towards Lake Babati and water resources.The Government led initiatives in addressing the challenges include Land management programs;the development of Natural resources Legal Frameworks;the Development of urban spatial growth guidance frameworks; and the establishment of Natural resources management policy frameworks. To this end, the study recommends physical boundary demarcation ofthe core area of the lake;public awareness creation campaign on existing bylaws, people’s responsibility in protecting the lake and the grave consequences of environmental neglect; and a review of policy and regulations to favorthe necessary needs of the communities around Lake Babati.