The northeasterly long shore transport (littoral drift) along the east coast of India shifts the mouth of the lagoon northeastwards. It results in lengthening of the outer channel, reduced tidal flux, fall in salinity levels, weed infestation, decline in fishery resources, and overall loss of biodiversity and productivity. The Chilika Development Authority made an artificial mouth near the village of Sipakuda, which was opened on 23 September 2000. The present study focuses on applications of Resourcesat‐1 LISS‐III and AWiFS data to understand the impact of the new mouth opening on the morphology and water quality of the Chilika Lagoon. Digital image processing of multi‐temporal Resourcesat‐1 AWiFS, LISS‐III, and IRS‐1D LISS‐III data was c...