Here, locating bioenergy crops on strategically selected subfield areas of marginal interest for commodity agriculture can increase environmental sustainability. Location and choice of bioenergy crops should improve environmental benefits with minimal disruption of current food production systems. We identified subfield soils of a tile-drained agricultural watershed as marginal if they had areas of low crop productivity index (CPI), were susceptible to nitrate-nitrogen (NO<
sub>
3<
/sub>
?N) leaching, or were susceptible to at least two other forms of environmental degradation (marginal areas). In the test watershed (Indian Creek watershed, IL) with annual precipitation of 852 mm, 3% of soils were CPI areas and 22% were marginal areas. The Soil and Water Assessment Tool was used to forecast the impact of growing switchgrass (<
i>
Panicum virgatum<
/i>
L.), willow (<
i>
Salix<
/i>
spp.), and big bluestem (<
i>
Andropogon gerardi<
/i>
Vitman) in these subfield areas on annual grain yields, NO<
sub>
3<
/sub>
?N and sediment exports, and water yield. Simulated conversion of CPI areas from current land use to bioenergy crops had no significant (p ? 0.05) impact on grain production and reduced NO<
sub>
3<
/sub>
?N and sediment exports by 5.0 to 6.0% and 3.0%, respectively. Conversion of marginal areas from current land use to switchgrass forecasted the production of 34,000 t of biomass and reductions in NO<
sub>
3<
/sub>
?N (26.0%) and sediment (33.0%) exports. Alternatively, conversion of marginal areas from current land use to willow forecasted similar reductions as switchgrass for sediment but significantly (p ? 0.01) lower reductions in annual NO<
sub>
3<
/sub>
?N export (18.0 vs. 26.0%).