The wave–current–seabed interaction problem is studied by using a coupled-mode system developed for modeling wave scattering by non-homogeneous, sheared currents in variable bathymetry regions. The model is based on a modal series expansion of wave velocity based on vertical eigenfunctions, dependent on local depth and flow parameters, including propagating and evanescent modes. The latter representation is able to accurately satisfy the wave flow continuity condition and the no-entrance boundary condition on the sloping parts of the seabed. A new derivation of a simplified nonlinear system is introduced using decomposition to a mean flow and a perturbative wave field. To force the system to consider incoming waves at the inlet, boundary knowledge of periodic, travelling nonlinear water waves over a flat bottom is required. For this purpose, specific solutions are derived using the semi-analytical method based on the stream function formulation, for cases of water waves propagating above linearly and exponentially sheared currents. Results obtained by the application of the CMS concerning the propagation of waves and currents—in particular, examples characterized by depth inhomogeneities—are presented and discussed, illustrating the applicability and performance of the method.