Knowledge of headwater influences on the water-quality and flow conditions of downstream waters is essential to water-resource management at all governmental levels; this includes recent court decisions on the jurisdiction of the Federal Clean Water Act (CWA) over upland areas that contribute to larger downstream water bodies. We review current watershed research and use a water-quality model to investigate headwater influences on downstream receiving waters. Our evaluations demonstrate the intrinsic connections of headwaters to landscape processes and downstream waters through their influence on the supply, transport, and fate of water and solutes in watersheds. Hydrological processes in headwater catchments control the recharge of subsurface water stores, flow paths, and residence times of water throughout landscapes. The dynamic coupling of hydrological and biogeochemical processes in upland streams further controls the chemical form, timing, and longitudinal distances of solute transport to downstream waters. We apply the spatially explicit, mass-balance watershed model SPARROW to consider transport and transformations of water and nutrients throughout stream networks in the northeastern United States. We simulate fluxes of nitrogen, a primary nutrient that is a water-quality concern for acidification of streams and lakes and eutrophication of coastal waters, and refine the model structure to include literature observations of nitrogen removal in streams and lakes. We quantify nitrogen transport from headwaters to downstream navigable waters, where headwaters are defined within the model as first-order, perennial streams that include flow and nitrogen contributions from smaller, intermittent and ephemeral streams. We find that first-order headwaters contribute approximately 70% of the mean-annual water volume and 65% of the nitrogen flux in second-order streams. Their contributions to mean water volume and nitrogen flux decline only marginally to about 55% and 40% in fourth- and higher-order rivers that include navigable waters and their tributaries. These results underscore the profound influence that headwater areas have on shaping downstream water quantity and water quality. The results have relevance to water-resource management and regulatory decisions and potentially broaden understanding of the spatial extent of Federal CWA jurisdiction in U.S. waters. ?? 2007 American Water Resources Association.