Due to the lack of experimental toxicity data for environmental chemicals, there arises a need to fill data gaps by in silico approaches. One of the most commonly used in silico approaches for toxicity assessment of small datasets is the Quantitative Structure-Activity Relationship (QSAR), which generates predictive models for the efficient prediction of query compounds. However, the reliability of the predictions from QSARs derived from small datasets is often questionable from a statistical point of view. This is due to the presence of a larger number of descriptors as compared to the number of training compounds, which reduces the degree of freedom of the developed model. To reduce the overall prediction error for a particular QSAR model, we have proposed here the computation of the novel Arithmetic Residuals in K-groups Analysis (ARKA) descriptors. We have reduced the number of modeling descriptors in a supervised manner by partitioning them into K classes (K = 2 here) depending on the higher mean normalized values of the descriptors to a particular response class, thus preventing the loss of chemical information. A scatter plot of the data points using the values of two ARKA descriptors (ARKA_2 vs. ARKA_1) can potentially identify activity cliffs, less confident data points, and less modelable data points. We have used here five representative environmentally relevant endpoints (skin sensitization, earthworm toxicity, milk/plasma partitioning, algal toxicity, and rodent carcinogenicity of hazardous chemicals) with graded responses to which the ARKA framework was applied for classification modeling. On comparing the performance of the models generated using conventional QSAR descriptors and the ARKA descriptors, the prediction quality of the models derived from ARKA descriptors was found, based on multiple graded-data validation metrics-derived decision criteria, much better than the models derived from QSAR descriptors signifying the potential of ARKA descriptors in ecotoxicological classification modeling of small data sets. Additionally, this holds true for the Read-Across approach as well, since the Read-Across predictions using ARKA descriptors supersede the predictions generated from QSAR descriptors. For the ease of users, a Java-based expert system has been developed that computes the ARKA descriptors from the input of QSAR descriptors.