Compared to discharge into waterways, land application of treated municipal effluent (TME) can reduce the need for both inorganic fertilizers and irrigation. However, TME irrigation may result in the accumulation of phosphorus (P) or trace elements in soil, and increased salinity and sodicity, which could damage soil structure and reduce infiltration. TME irrigation can also result in groundwater contamination through nitrate leaching or surface water contamination through runoff. This study aimed to evaluate the effects of increasing TME irrigation rates on quantity and quality of leachate and pasture growth in a lysimeter experiment using a Fluvial Recent soil and a Fragic Pallic soil. Pasture growth in the lysimeters was up to 2.5-fold higher in the TME treatments compared to the non-irrigated treatments. There were no signs of toxicity or accumulation of B, Al, Cd, Cu, Fe, Mn, As, and Zn. TME significantly increased the concentration of P and Na in the pasture. Nitrogen leaching from the lysimeters was negligible (< 1 kg/ha −1 equiv.) in all treatments, but mineral N accumulated in the soil profile of the highest application rate (1672 mm/yr). Although more P was added than removed in pasture, the rate of accumulation indicated that over a 50-year period, P will still be within the current New Zealand thresholds for grazed pastures. Sodium accumulated in the soil columns in all the TME treatments. The rate of accumulation was not proportional to the TME application rate, indicating that Na was moving down through the soil profile and leaching. Results indicate a low to moderate risk of sodicity in soil or toxicity in plants caused by Na.