Agricultural watersheds of the Midwest typically export nitrogen (N) and phosphorus (P) to surface waters causing contamination of drinking water reservoirs and, ultimately, hypoxia in the Gulf of Mexico. Two agricultural runoff wetlands, W1 (area 0.16ha, volume 660m 3 ) and W2 (area 0.4ha, volume 1780m 3 ), intercepting surface and tile drainage in the Lake Bloomington, Illinois, watershed were constructed in 1996 on forest soils (alfisols) between upland cropland and Lake Bloomington. They were created to determine whether wetlands could reduce agricultural nonpoint source pollution before it entered the Lake Bloomington drinking water reservoir. Water (precipitation, tile inflow, surface inflow, outflow, seepage and evaporation) and nutrient (N, P and carbon [C]) budgets were determined from 1 April 1998 to 30 December 1999 for each wetland. Combined, the wetlands received 746kg NO 3 -N as tile loading, 104kg as surface loading and exported 545kg of NO 3 -N as outflow and seepage. Mass NO 3 -N retention was 36%. Following wetland treatment, overall volume-weighted NO 3 − -N concentrations were reduced by 42% (W1) and 31% (W2). Combined P mass retention was 53%, and combined total organic carbon (TOC) mass retention was 9%. Wetlands were constructed in a sloping drainage (5%) where surface runoff was a major component of flow. Nutrient dynamics of P and C were affected by site slopes. Calculations made by extrapolating these results indicate that a wetland area of 450ha would be required in the Lake Bloomington watershed to reduce N loading by 46%, at a construction cost ranging from 3 to 3.5 million dollars. Results support the growing evidence that agricultural runoff wetlands can effectively reduce NPS pollution loading in the Mississippi River Basin.