Masan bay is one of the polluted enclosed bays, which has red tides problem and the formation of oxygen deficient water in the bottom layer. Most important factors that cause eutrophication and red tide is nutrient materials containing nitrogen and phosphorus which stem from terrestrial sources and nutrients released from sediment. Therefore, to improve of water quality, reduction of these nutrient loads should be indispensible. At this study, the three-dimensional numerical hydrodynamic and eutrophication model, which were developed by Institute for Resources and Environment of Japan, were applied to analyze the processes affecting the phytoplankton production and also to evaluate the effect of water quality improvement plans on phytoplankton production. In field sorvey, the range of concentrations of chlorophyll-a at surface area was found to be 29.17 - 212.5mg/m3, which were exceeding eutrophication criteria. The constant currents defined by integrating the simulated tidal currents over 1 tidal cycle showed the counterclockwise eddies in the southern part of Budo. The general directions of constant currents were found to be southward at surface and northward at bottom over all the bay. The eutrophication model was calibrated with the data surveyed in the field area in June, 1993. The calculated results are in fairly good agreement with values within relative error of 30%. The pollutant load from the sources such as the input from terrestrial release from the sediment was reduced by the rate of 50, 70, 90, 98% to effect of phytoplankton production. Phytoplankton production was reduced to of the 90% reduction of the input loads from terrestrial sources and 8% in 90% reduction of the load from sediment.