Coal Creek drains a 1,087-acre watershed that has nearly three miles of salmon spawning and rearing habitat. The creek flows through second growth and mature timber, owned by Tillamook County, before reaching private agricultural land and emptying into the Kilchis River in the Tillamook Bay Watershed. A fish passage barrier dam on Coal Creek at rivermile 1.7 terminates all fish passage to the remaining one mile of habitat. Coal Creek supports coho, chinook, steelhead, cutthroat, and is one of the biggest chum producers in Tillamook County. According to Oregon Department of Fish and Wildlife (ODFW) 2002 spawning surveys, one surveyor observed 809 live chum and 263 redds in the 1.7 miles between the dam and Coal Creek's confluence with the Kilchis River.

The dam, 4 drainage culverts, several forest roads, a failed waterline in the riparian area, lack of riparian vegetation around the reservoir, and degraded salmon spawning and rearing habitat all contribute to less than optimal watershed conditions.

View of Coal Creek reservoir