This paper addresses a lacuna in the field of modern Egyptian history concerning state-society relations in communities bordering bodies of water. Traditionally, historiography on Egypt in the 19th and 20th centuries focuses primarily on the peasant and, to a lesser extent, the Bedouin populations of Egypt. I study the formation of modern state sovereignty during the Khedival and Colonial periods of Egyptian history in the 19th and early 20th centuries in the northeastern lake of Manzala and northwestern lake of Burullus, paying attention to relations between fishing villages and the urban centers of Damietta and Alexandria. I look at attempts by different state institutions — the private estate of Khedive ‘Abbas Hilmi II (Daira Khassa), the Interior Ministry, and the Egyptian Coastguard — as well as private entities such as European companies and large endowments (waqfs) in controlling the mobility and labor of fishermen. Rather than viewing the formation of state sovereignty as a top-down process, I pay attention to how the State, as a layered and fragmented entity, inserted itself into a regional political economy that was centered around a system of exchange between several commodities — fish, salt, and cannabis (hashish). This exchange system rested on a transregional smuggling network, through which Egyptian fishermen partnered with Bedouin barley farmers and salt smugglers in the hinterland of Alexandria, as well as with hashish smugglers through Ottoman and Greek territories in the Eastern Mediterranean. On a broader note, this is a study of the everyday interaction of Egyptian subjects with bodies of water, as I also pay attention to their affective geographies around lakes, ponds, and seashores.