Turning salt water into drinking water is not a solution to tackle global water scarcity, the WWF has said.
Untapped resource: oceans contain 97% of the planet's water
A report by the environmental group said a growth in the energy intensive technology would increase emissions and damage coastal and river habitats.
More attention should instead be paid to conserving supplies, it suggested.
The study was published as Australia announced plans to build one of the world's biggest desalination plants to supply drinking water to Melbourne.
"Desalinating the sea is an expensive, energy intensive and greenhouse gas emitting way to get water," said Jamie Pittock, director of WWF's global freshwater programme.
"It may have a place in the world's future freshwater supplies but regions still have cheaper, better and complementary ways to supply water that are less risky to the environment."
The report called for greater emphasis on managing existing supplies before the go-ahead was given to major water projects.
It added that new desalination plants, which were primarily located in coastal areas, should also be subject to tighter impact assessments to minimise damage to the marine environment.
Advances in technology meant that it was also possible to develop alternative "manufactured water" systems, such as treating waste water, the authors wrote.
Desalination plants already play a major role in providing water for drinking and irrigation in areas such as the Middle East, where freshwater supplies are scarce.
But many other nations, including the US, China and Spain are turning to the technology to meet growing demands.
"Water supply, on a global basis, is a problem," commented Richard Bowen, a fellow of the Royal Academy of Engineering.
"Desalination is set to become more important because the demand for water is going to increase, and a large percentage of the world's population is situated in coastal areas."
Professor Bowen, from the University of Wales' School of Engineering, Swansea, said the environmental impact of desalination was well understood by the industry.
"The basic problem is that by taking sea water and producing fresh water, you are going to get a stream of fresh water, which is what you want, but you also produce a concentrated salt stream," he explained.
"You have to be very careful what you do with that concentrated stream and where you put it back into the environment.
"There have been quite careful studies into the effects of this, so it is a consideration in the development of a new plant."
The government in the Australian state of Victoria on Tuesday announced plans to build one of the world's biggest desalination plants near Melbourne.
The project, which is expected to be completed by 2011, is part of a scheme to "drought-proof" water supplies to the nation's second largest city.
Southern Australia has been in the grips of a six-year drought, the worst on record.
The WWF report acknowledges that the technology had a "limited place in water supply", but each project should be assessed on a case-by-case basis, it argued.
It recommended: "Desalination plants... should only be constructed where they are found to meet a genuine need to increase water supply and are the best and least damaging method."