Heavy metal pollution in aquatic ecosystem has become a serious concern due to its toxicity, persistence and accumulative behavior. The present study was aimed at studying the levels of Cd, Co, Cr, Cu, Fe, Mn, Ni, Pb, Zn and their relationships with different physico-chemical parameters like pH, OC, sand, silt and clay to evaluate the risk of heavy metal pollution in Halali reservoir. Data were processed using Pearson’s correlation coefficients and factor analysis. Positive relationships among the metals confirmed the anthropogenic sources of pollution in the reservoir. The persistence and fate of the metal depended more on its chemical forms than on total metal concentrations. By applying the sequential extraction method and Risk Assessment Code (RAC) it was found that Ni and Zn were at low risk, while Cu and Mn were at medium risk. By using the freshwater sediment quality guidelines it was established that there was a growing possibility of Cr and Cu toxicity for the aquatic biota of Halali reservoir.