Potentially toxic elements (PTEs), including cadmium (Cd), copper (Cu), lead (Pb), zinc (Zn), mercury (Hg), and chromium (Cr), in the water-level fluctuation zone (WLFZ) of the Dahuofang Reservoir were surveyed in regard to their concentrations, spatial distributions, risks, and possible sources. Sediment samples were collected at 12 typical sites located in the WLFZ of the Dahuofang Reservoir. The median values of Cd, Cu, Pb, Zn, and Cr all exceeded the soil background values in Liaoning Province. Based on the spatial distributions of these PTEs, the highest enrichment occurred at the R12 site. Cadmium, Cu, and Pb attained the highest contents at R12. The mean geoaccumulation index (Igeo) value of Cd indicated heavy contamination, and that of Pb indicated moderate to heavy contamination, while those of Cu and Zn indicated none to moderate contamination. The negative Igeo values of Cr and Hg indicated the uncontaminated level. According to the potential ecological risk index (RI), Pb posed a moderate risk, while Cd posed a high risk, Zn, Cr, Hg, and Cu posed a low risk. The R12 site exhibited the highest ecological risk. By applying multivariate statistical analysis, two principal components were extracted representing 62.992% of the total variance, and the results showed that the accumulation of Cr, Pb, and Hg might be ascribed to a nearby coal-fired electric power plant. Cadmium, Cu, and Zn were enriched owing to mineral sources, agricultural contamination, and coal combustion.