The Esopus Creek is a watershed divided into two parts by the Ashokan Dam. The area above the dam is commonly referred to as the Ashokan Basin. Below the dam is the Lower Esopus Watershed. The Lower Esopus is generally cut off from the watershed above the dam except for reservoir releases and spillway overflow. The Lower Esopus includes two tributaries or sub-basins: the Plattekill and Sawkill. The lower creek has three distinct stream segments plus a tidal estuary at its mouth.

The entire Esopus Creek watershed area (upper and lower) is 425 square miles. Flow from the 256 square miles of the upper drainage area has been regulated by the Ashokan Reservoir since Sept. 9, 1913. Additional water enters Esopus Creek about 12.2 mi upstream from Ashokan Reservoir through Shandaken Tunnel, which diverts water from Schoharie Creek since Feb. 3, 1924. Diversions for water supply of city of New York are made from Ashokan Reservoir via the Catskill Aqueduct. The flow in the lower Esopus Creek represents the drainage from 169 square miles of watershed combined with spillage or releases from the upstream reservoirs. Diversions from Plattekill Creek at the Blue Mountain Reservoir provide drinking water for the Village of Saugerties. Also, a slight diversion occurs at headwaters of the Saw Kill into Cooper Lake for water supply of Kingston. Water is diverted from the lower Esopus Creek for agricultural irrigation.