Lake Rodó (Montevideo, Uruguay) is a small, urban, hypertrophic lake undergoing restoration. In this study, we evaluated the nutrient removal efficiency and water quality improvement attributable to a water recirculation system, consisting of the lake and three connected pools converted to artificial wetlands dominated by free-floating hydrophytes. Eichhornia crassipes and Spirodela intermedia dominated the hydrophyte community during summer and winter, respectively, with the biomass production being maintained throughout the year. The maximum production values of E. crassipes were 11.3 and 5.6 g DW m−2 d−1 in the summers of 1998 and 2000, respectively, while those of S. intermedia were 2.7 and 0.8 g DW m−2 d−1 in the summers of 1999 and 2000, respectively. The aquatic plant community reduced the concentration of nutrients in the water column but did not significantly affect the sediment concentrations. Harvesting the hydrophytes removed the equivalent of 58–88% and 39–78% of the nitrogen (N) and phosphorus (P) load associated with the water column, respectively. In contrast, the harvests accounted for only 1–2% of the N and P load associated with the sediments. In the pools, the combination of water recirculation and hydrophytes generally diminished the algal biomass and the associated N and P, compared to that observed for the lake. The combined use of adequate aquatic plant harvests and hydraulic management increased the efficiency of the system and, therefore, seems to be a useful tool for restoring small, shallow lakes in tropical and subtropical regions.