Evaluation of hydrological data obtained between 2000 and 2013 from a time series station in Kuwait Bay (station K6) and an offshore southern location (station 18) off Kuwait showed drastic increase in salinity by 6 units. We tested the hypothesis that increased salinity impacted phytoplankton community characteristics in these semiarid waters. The Arabian Gulf receives seasonal freshwater discharge in the north via Shatt Al-Arab estuary with a peak during March-July. A north to south gradient in the proportion of the freshwater exists between station A in the vicinity of Shatt Al-Arab estuary and station 18 in the southern offshore area. At station A, the proportion of freshwater was the highest (25.6-42.5%) in 1997 but decreased to 0.8-4.6% by 2012-2013. The prevailing hyperhaline conditions off Kuwait are attributed to decrease in the river flow. Phytoplankton data showed a decrease in the number of constituent taxa in the last one decade from 353 to 159 in the Kuwait Bay and from 164 to 156 in the offshore area. A shift in their biomass was caused by a decrease in diatom species from 243 to 92 in the coastal waters and from 108 to 83 in the offshore areas with a concomitant increase of smaller algae. Mutivariate agglomerative hierarchical cluster analysis, non-metric multi-dimensional scaling, and one-way analysis of similarity analyses on phytoplankton data at different taxonomic levels confirmed significant changes in their community organization on a decadal scale. These evidences support our hypothesis that the salinity-related environmental changes have resulted in a coincidental decrease in species diversity and significant changes in phytoplankton community between the years 20002002 and 2012-2013, off Kuwait. This in turn would affect the pelagic trophodynamics as evident from a drastic decrease in the catch landings of Tenulosa ilisha (Suboor), Carangoides sp. (Hamam), Otolithes ruber (Nowaiby), Parastromateus niger (Halwaya), and Epinephelus coioides (Hamoor) in Kuwait.