Abstract Construction of a network of canals to reclaim a large area of tidal backswamp for wetland rice development in Central Kalimantan has raised a serious concern to many parties about its negative impact on soil properties, water quality and sustainable production. The objective of this study was to investigate alteration in soil properties after ‘reclamation’ and the associated dynamic water quality. The soils were sampled from each horizon of profiles and classified before and after ‘reclamation’. The water was sampled from inlets and primary and secondary canals for laboratory analyses. The results showed that after ‘reclamation’ of mineral soils, the peat surface layer became thinner (i.e., from 20–40 cm to 13–21 cm) or even disappeared and that soil ripeness increased in oxidised and reduced layers of profiles. ‘Reclamation’ decreased soil pH values, increased Al 3+ and Al saturation and promoted cation leaching. Pyrite concentration in reduced layers of profiles considerably decreased from 2.6–5.2% before ‘reclamation’ to 0.3–1.9% after ‘reclamation’, suggesting pyrite was being oxidized. Similar morphology (8–25 cm surface loss) and chemical alterations occurred in organic soils accompanied by increasing decomposition stage as revealed by fibre content, which decreased from 60–73% to 13–27%. The quality of water considerably decreased due to leaching of pyrite oxidation products from rice fields as indicated by the trends of decreasing pH values and of increasing values in EC and concentrations of cations and anions from inlets (as a control) to a primary canal and secondary canals. An implication of the study is that the ground water table should be kept over the pyrite position (approximately 60 cm from the soil surface) or oxidation products and associated acidity should be leached out from the arable land by rainfall or tidal flushing to allow crop development.