Ologe Lagoon is one of Lagos, Nigeria’s five major lagoons, which provide essential ecosystem services such as agriculture, fishing, transportation, salt and sand mining, tourism, and industrial development. There are concerns, however, that the lagoon’s water may not be safe for the ecosystem functions it offers. As a result, the physicochemical properties, heavy metal concentrations, and microbial loads of water samples from the lagoon, as well as their health risks, were examined in this study. Physicochemical analysis showed that calcium, chloride, nitrates, sulphate, dissolved oxygen, acidity, alkalinity, total dissolved solid, and total suspended solid were present within the World Health Organization permissible limits, but not so for phosphate and temperature. The heavy metal analysis revealed that the water had non-permissible levels of iron, cadmium, chromium, nickel, manganese, and copper, but lead was normal. The microbiological examination showed abnormal bacteria counts, while coliform and fungus were not detected. The average daily oral and dermal exposure to cadmium, chromium, and nickel were higher than the recommended daily intake, but iron, lead, and copper were within the limits. The hazard quotient of oral and dermal exposure to cadmium, dermal exposure to chromium, and oral exposure to manganese were higher than the recommended limit (> 1). The carcinogenic risks of Cd, Cr, and Ni were also greater than the acceptable limit. The results obtained indicate that Ologe Lagoon’s water is unsafe for the lagoon’s ecosystem functions. Relevant agencies should ensure that waste is treated before being discharged into the lagoon.