Farmers can generate environmental benefits (improved water quality and fisheries and wildlife habitat), but they may not be able to quantify them. Furthermore, farmers may reduce their incomes from managing lands to produce these positive externalities but receive little monetary compensation in return. This study simulated the relationship between agricultural practices, water quality, fish responses to suspended sediment and farm income within two small watersheds, one of a cool water stream and one of a warm water stream. Using the Agricultural Drainage and Pesticide Transport (ADAPT) model, this study related best management practices (BMPs) to calculated instream suspended sediment concentrations by estimating sediment delivery, runoff, base flow, and streambank erosion to quantify the effects of suspended sediment exposure on fish communities. By implementing selected BMPs in each watershed, annual net farm income declined $18,000 to $28,000 (1 to 3 percent) from previous levels. “Lethal” fish events from suspended sediments in the cool water watershed decreased by 60 percent as conservation tillage and riparian buffers increased. Despite reducing suspended sediments by 25 percent, BMPs in the warm water watershed did not reduce the negative response of the fisheries. Differences in responses (physical and biological) between watersheds highlight potential gains in economic efficiency by targeting BMPs or by offering performance based “green payments.”