Watershed processes – physical, chemical, and biological – are the foundation for many benefits that ecosystems provide for human societies. A crucial step toward accurately representing those benefits, so they can ultimately inform decisions about land and water management, is the development of a coherent methodology that can translate available data into the ecosystem services (ES) produced by watersheds. Ecosystem services (ES) provide an instinctive way to understand the tradeoffs associated with natural resource management. We provide a synthesis of common terminology and explain a rationale and framework for distinguishing among the components of ecosystem service delivery, including: an ecosystem’s capacity to produce a service; societal demand for the service; ecological pressures on this service; and flow of the service to people. We discuss how interpretation and measurement of these components can differ among provisioning, regulating, and cultural services and describe selected methods for quantifying ES components as well as constraints on data availability. We also present several case studies to illustrate our methods, including mapping capacity of several water purification services and demand for two forms of wildlife-based recreation, and discuss future directions for ecosystem service assessments. Our flexible framework treats service capacity, demand, ecological pressure, and flow as separate but interactive entities to better evaluate the sustainability of service provision across space and time and to help guide management decisions.