Quantification of the various impacts of biofuel feedstock production on hydrology and water quality is complex. Mathematical models can be used to efficiently evaluate various ‘what if’ scenarios related to biofeedstock production and their impacts on hydrology and water quality at various spatial and temporal scales. Currently available models, although having the potential to serve such purposes, have many limitations. In this paper, we review the strengths and weaknesses of such models in light of short- and long-term biofeedstock production scenarios. The representation of processes in the currently available models and how these processes need to be modified to fully evaluate various complex biofeedstock production scenarios are discussed. Similarly, issues related to availability of data that are needed to parameterize and evaluate these models are presented. We have presented a vision for the development of decision support tools and ecosystem services that can be used to make watershed management decisions to minimize any potentially adverse environmental impacts while meeting biofeedstock demands. We also discuss a case study of biofeedstock impact simulation in relation to watershed management policy implications for various state and federal agencies in the USA.