The strategies for sustainable development of coastal aquaculture were explored in the present investigation utilizing the capabilities of satellite remote sensing technique and GIS. Artificial neural network and analytical hierarchy process techniques were used for analysis of the data. The quantification of land-cover changes, detection of change trajectories, water quality monitoring, identification and prioritization of potential sites for shrimp culture were carried out in the coastal mandals of East Godavari District for sustainable development of coastal aquaculture. The analysis of series of multi-temporal satellite data provided the accurate quantification and therefore, understanding of the process of land-cover changes during 1990-2005. Land-cover changes were quantified based on Normalized Difference Vegetation Index (NDVI) image differencing and post classification comparison approach. The study shows that total area under aquacultural ponds increased from 2984.8 ha in 1990 to 7067 ha in 2005. The major changes in the study area occurred during 1990-1994. The agricultural land of 2872.8 ha and degraded mangroves of 761.6 ha were converted to aquacultural ponds during this period. The prediction of land-cover distribution in 2010 on the basis of Markov chain shows a continuing upward trend of aquaculture area (8267.1 ha) with less impact on mangrove area. The prediction shows that agricultural land area would continue to decrease from 50121.9 ha to 46978.2 ha during 2005-2010.