Over 70% of Petticoat Creek watershed is designated as "Protected Countryside" by the provincial Greenbelt, established in 2005. The western third of the watershed is protected in Rouge Park, and the northern half falls within the Province of Ontario's Central Pickering Development Plan (2006) area.
Agriculture dominates the northern portion of the watershed, interspersed with a number of large, provincially significant wooded swamps. The southern half is largely developed, with the notable exception of Altona Forest, and Petticoat Creek Conservation Area at the creek mouth. While there may be pressure for intensified development in the southern portion, provincial legislation precludes new development in the northern and western portions of the watershed.
Petticoat Creek watershed is dominated by the South Slope physiographic region, a smooth, faintly drumlinized till plain. The lower reaches of the watershed near Lake Ontario are dominated by ancient deposits laid down in glacial Lake Iroquois, or ancestral Lake Ontario. The southern part of the watershed along the Lake Ontario shore is mainly urban, in the City of Pickering, with large tracts of agricultural land to the north of the urban boundary. Much of the developed area is situated south of the Lake Iroquois shoreline.
The hydrology of Petticoat Creek watershed is a reflection of the watershed's geology and climate. Since it is not fed by groundwater from the Oak Ridges Moraine, stream flow in Petticoat Creek responds rapidly to precipitation and snow melt. While precipitation amounts are evenly distributed throughout the year, stream runoff is reduced during the summer months due to evaporation. The headwaters are frequently dry in summer. Lower reaches of the creek, below the Lake Iroquois shoreline, receive flow from the regional groundwater system.
The physical components of the aquatic habitat in Petticoat Creek contain a good mixture of habitat types, habitat quality is influenced by the intermittent nature of the stream flow. Additionally, there are barriers to fish passage in the stream such as perched culverts. Based on the fish species currently inhabiting this watershed, it is best classified as a warm water baitfish community.
In terms of terrestrial habitat, Petticoat Creek watershed is located along the boundary between the Carolinian and Great Lakes-St Lawrence Mixed Forest zones. It provides important ecological linkages between the neighbouring Rouge River and Duffins Creek watersheds, and between the Oak Ridges Moraine and Lake Ontario. Historically, the watershed would have been predominantly covered in forest and wetlands. Over time this natural cover, along with its environmental benefits, was diminished by human activity to what is now considered below the desired level. Today, natural cover in the form of forests, wetlands, and meadows is concentrated in public greenspace areas:
- Altona Forest
- Townline Swamp Wetland Complex (Provincially Significant Wetland)
- Petticoat Creek Forest, an Environmentally Significant Area comprised of a valley system linking Altona Forest to Lake Ontario
- Eastern areas of Rouge Park
- The hydro corridor
Wetlands in the watershed include Petticoat Creek Wetland, an Environmentally Significant Area located northwest of York-Durham Line and Steeles Avenue East, and Cherrywood Swamp, which is Locally Significant and supports a Regionally Significant great blue heron colony.