Water scarcity is increasingly a global cause of concern mainly due to widespread changes in climate conditions and increased consumptive water use driven by the exponential increase in population growth. In addition, increased pollution of fresh water sources due to rising production and consumption of pharmaceuticals and organic chemicals will further exacerbate this concern. Although surface water contamination by individual chemicals is often at very low concentration, pharmaceuticals for instance are designed to be efficacious at low concentrations, creating genuine concern for their presence in freshwater sources. Furthermore, the additive impact of multiple compounds may result in toxic or other biological effects that otherwise will not be induced by individual chemicals. Globally, different legislative frameworks have led to pre-emptive efforts which aim to ensure good water ecological status. Reports detailing the use and types of effect-based measures covering specific bioassay batteries that can identify specific mode of actions of chemical pollutants in the aquatic ecosystem to evaluate the real threat of pollutants to aquatic lives and ultimately human lives have recently emerged from monitoring networks such as the NORMAN network. In this review, we critically evaluate some studies within the last decade that have implemented effect-based monitoring of pharmaceuticals and organic chemicals in aquatic fauna, evaluating the occurrence of different chemical pollutants and the impact of these pollutants on aquatic fauna with special focus on pollutants that are contaminants of emerging concern (CEC) in urban wastewater. A critical discussion on studies that have used effect-based measures to assess biological impact of pharmaceutical/organic compound in the aquatic ecosystem and the endpoints measurements employed is presented. The application of effect-based monitoring of chemicals other than assessment of water quality status is also discussed.