Reservoir construction and river diversions have dramatically reduced freshwater inflow to coastal salt marshes of the Nueces Estuary, Texas, facilitating hypersaline conditions. To moderate salinities and enhance habitat quality, ∼ 7570 m³ d⁻¹ of treated wastewater effluent was used as a nutrient-rich freshwater source in the lower estuary. For ∼1.5 years prior to and ∼3.5 years following wastewater diversion, we quantified salinity, inorganic nitrogen, and emergent vegetation changes at four stations various distances downstream from the diversion point. Wastewater prevented hypersaline conditions at station 72, closest to the diversion, but not downstream. Increased tidal creek NH₄ and NO₃⁻ NO₂⁻ concentrations were detectable 1200 m downstream, but concentrations were 50%–80% of those measured at station 72 within 325 m downstream. Emergent vegetation responded at station 72 only. Composition rapidly shifted (over a period of ≤ 1 y) from ∼80% monospecific cover of a highly salt-tolerant succulent, Salicornia virginica, to ∼50% cover of a less salt-tolerant shrub, Borrichia frutescens, intermixed with several other species. Percent cover ordination plots on each sampling date verified distinct pre- and postdiversion plant communities at this station. Mean porewater nutrient concentrations were not different among stations postdiversion, but lower C : N ratios and increased δ¹⁵N signatures of B. frutescens confirmed assimilation of wastewater-derived nitrogen at station 72. A variety of plants colonized bare areas near the diversion, creating about seven hectares of newly vegetated salt marsh. Wastewater diversions lowered salinity, increased nutrients, and increased cover of less salt-tolerant vegetation species near the diversion. However, these changes were restricted to a limited area, suggesting that increased diversions are necessary to produce substantial downstream effects.