Arsenic contamination remains a major environmental and public-health concern due to its widespread occurrence, persistence, toxicity, and complex behavior in aquatic and sedimentary environments. This review synthesizes current knowledge on the occurrence, sources, speciation, biogeochemical transformation, mobility, toxicity, analytical determination, and risk-based monitoring of arsenic in water, sediments, porewater, and related environmental matrices. Particular emphasis is placed on the environmental significance of arsenic speciation, highlighting the contrasting behavior of arsenite [As(III)] and arsenate [As(V)] under varying redox and pH conditions. The review demonstrates that arsenic mobility and bioavailability are strongly regulated by sediment–water interactions involving iron and manganese oxyhydroxides, sulfide minerals, organic matter, microbial processes, and porewater dynamics. These interactions control arsenic retention, transformation, and secondary release, allowing sediments to function as both long-term sinks and potential contamination sources. Advances in analytical chemistry, particularly ICP-MS and HPLC-ICP-MS, have significantly improved the determination of total arsenic and species-specific characterization; however, challenges associated with species preservation, extraction efficiency, matrix interference, and quality assurance remain critical. The review further emphasizes that environmental risk cannot be adequately assessed using total arsenic concentrations alone. Instead, effective monitoring should integrate arsenic speciation, geochemical conditions, sediment–water processes, exposure pathways, and analytical reliability. Such an integrated, species-specific, and risk-based framework provides a stronger basis for understanding arsenic behavior, predicting environmental impacts, and supporting sustainable management of contaminated aquatic systems.