In a peri-urban area 45 Km East of Kampala, Lugazi Town of 40,000 people is nestled off the Jinja-Kampala highway and grapples with the perils of pollution. To explore the perils, a study was carried out to assess the effect of the abattoir effluent on the water quality of the stream into which it discharged its effluent. Field and laboratory assessments were carried out to determine the concentration of nutrients and physicochemical parameters upstream and downstream relative to the point of effluent discharge. Findings revealed that the abattoir was not appropriately situated as it is close to human residential dwellings. Grey water from the human dwellings joined the abattoir effluent discharge canal. The effluent is discharged into the stream without pre-treatment. The concentration of TP, SRP, NH4-N, NO3-N, and NO2-N and BOD except COD in the effluent were within the National Environment Standards for Discharge of Effluent into Water and on Land. The higher values of COD in effluent are attributed to the grey water. Though the results suggest that the water quality is not adversely impaired, pre-treatment of waste is required to forestall any likely pollution.