Over a long period of time, a huge amount of technogenic bottom sediments has been accumulating in the Kosva Bay with significant concentrations of amorphous iron and aluminium hydroxides, which, in turn, are active sorbents of pollutants. This study examines the distribution of trace elements (TE) and rare earth elements (REE) and their toxicity in the Kosva Bay of the Kama Reservoir (Perm Region, Russia). In the middle reach, the Kosva River crosses the Kizel coal basin, where acid mine water is discharged from closed mines. The average content of trace elements in the samples of bottom sediments of the bay varies from 0.10 mg/kg (Se) to 176.36 mg/kg (Ba). The amount of rare earth elements varies from 66.8 to 83.6 mg/kg. The ecological significance of trace elements and rare earth elements was studied using an element-by-element assessment (EF and Igeo), Potential Ecological Risk Index (RI), Mean Probable Effect Concentration Quotient (PECQ), and two bioassays (Daphnia magna Straus and Scenedesmus quadricauda (Turp.) Breb). The highest Hg enrichment was found at two sampling points. Taking into account the average value of Igeo, the pollution by Co, V, Nb, Hg, Sn, Zn, Sm, Ni, Cr, and Gd is the highest and corresponds to ‘extremely contaminated’ category. The RI values indicate that pollution categories vary from ‘moderate risk’ to ‘considerable risk’. According to mean PECQ values, bottom sediments of the bay have moderate potential toxicity towards biological communities. Results of chronic and acute toxicity experiment on test objects D. magna and Scenedesmus quadricauda Breb show the water extract from bottom sediments having no effects on the test objects. The results of the study show that in order to assess the quality of bottom sediments, an integrated approach, combining chemical and ecotoxicological analyses, is needed.