Kelani River is the fourth-longest river on the South-Asian island, Sri Lanka. It originates from the central hills and flows through a diverse array of landscapes, including some of the most urbanized regions and intensive land uses. Kelani River suffers a multitude of environmental issues: illegal water diversions and extractions, impoundment for hydroelectricity generation, and pollution, mostly from agrochemicals, urban runoff, industrial discharges, and domestic waste. Moreover, loss of riparian forest cover, sand-mining, and unplanned development in floodplains have accentuated the environmental damage. In this study, based on the Kelani River basin, we reviewed the status of biodiversity, threats encountered, conservation challenges, and provided guidance for science-based conservation planning. Kelani River basin is high in biodiversity and endemism, which includes 60 freshwater fish species of which 30 are endemic. Urbanization-related threats are more severe in the middle and lower reaches while agriculture and impoundments peril the river in the upper reaches. Documentation of these threats can be dated back to 1980, yet, Sri Lankan government has failed to take substantial actions for sustainable management of the Kelani River basin, despite the presence of nearly 50 legislations pertaining to water and land management. Given high biodiversity richness, human dependency, and evident ecological deterioration, the Kelani River basin should be prioritized for biodiversity conservation and sustainable resource management. Conservation and wise use of freshwater resources is a global concern, particularly for developing nations in Asia. Therefore, our review and guidance for scientifically informed conservation would serve as a prototype for basin-wide river management for Sri Lanka as well as for other developing nations of tropical Asia.