The occurrence of bioactive compounds and contaminant-associated effects was assessed by means of in vivo and in vitro assays using different extractable fractions of surface sediments from a contaminated coastal lagoon (Mar Menor, SE Spain). Sediment elutriates and clean seawater, previously exposed to whole sediment, were used for assessing the in vivo toxicity on embryo development of the sea urchin Paracentrotus lividus. Agonist and antagonist activities relating to estrogen and androgen receptors and agonist activities on aryl hydrocarbon receptor (expressed as ethoxyresorufin-O-deethylase (EROD) activities) were investigated in sediment extracts by using HER-Luc, AR-EcoScreenTM and fibroblast-like RTG-2 cell lines. Embryotoxicity effects were greater for sediment elutriates than those incubated in sediment-water interphase, implying that diffusion of bioactive chemicals can occur from sediments to sea water column, favoured by sediment disturbance events. In vitro results show the occurrence in extracts of compounds with estrogen antagonism, androgen antagonism and dioxin-like activities. Multidimensional scaling analysis classified the sampling sites into four sub-clusters according to their chemical-physical and biological similarities, relating in vitro bioactivity with the total organic carbon and known organic chemical load, with particular reference to total sum of PAHs, PCB 180, p,p-DDE and terbuthylazine. Overall, results pointed to the presence of unknown or unanalyzed biologically-active compounds in the sediments, mostly associated with the extracted polar fraction of the Mar Menor lagoon sediments. Our findings provide relevant information to be considered for the environmental management of contaminated coastal lagoons.