Aspects of phytoplankton community structure (e.g., taxonomic composition, biomass) and function (e.g., light adaptation, net oxygen production, exudation) can be inferred with a binning method that uses water transparency (Secchi depth), dissolved inorganic nitrogen, and ortho-phosphate to classify phytoplankton habitat conditions in the surface mixed layer. The method creates six habitat categories, forming a disturbance scale from turbid, nutrient-enriched waters (“degraded”) to clear waters with bloom-limiting nutrient concentrations (“reference”). Across this disturbance scale, estuarine phytoplankton exhibit strong differences in chlorophyll a, count-based biomass, trophic mode, average cell size, photopigment cell content, taxonomic dominance, and the frequency of algal blooms. Differences in ambient dissolved oxygen and dissolved organic carbon are also observed. Two alternate states are apparent, separated primarily by water transparency, or clarity.Water transparency determines cellular light-adaptation and the potential for photosynthesis and growth; nutrient concentrations determine how much of that potential can be realized if and when light becomes available. In Chesapeake Bay, Secchi depth thresholds separating the two states are 0.7–0.9 m in shallow, well-mixed, low salinity waters and 1.2–2.1 m in deeper, stratified, higher salinity waters. The water quality binning method offers a conceptual framework that can be used to infer the overall state of a phytoplankton population more accurately than chlorophyll a alone.