The purpose of this study is to investigate the saltwater intrusion phenomenon in the alluvial aquifer of Katapola, on Amorgos Island, under current and future climatic conditions and to provide groundwater management options for alleviating this problem. To this end, a groundwater flow model was developed and the sharp-interface approximation combined with the Ghyben–Herzberg equation was used. A correction factor that accounts for the hydrodynamic dispersion occurring at the brackish zone was also incorporated in the analysis. The model results show that under the current pumping strategy, the saltwater intrusion front extent is vast, posing a serious threat to the quality of groundwater used for drinking and irrigation in the area. The management goal is to find the alternative pumping scenarios for the existing well network that will prevent further spreading of saltwater intrusion. Several water management scenarios were developed, taking into account the effects of climate change, the increase in water supply demand and the expected population growth. The results indicate that controlling the propagation of seawater intrusion in Katapola necessitates the periodic deactivation of most of the pumping wells and the design of alternative plans in order to meet the increasing water demand.