The effectiveness of a granular formulation of dicyandiamide (DCD) in limiting nitrate leaching from a grazed dairy pasture in southern New Zealand is reported. Treatments were an untreated Control managed as standard farm practice, and+DCD with two or three applications of DCD per annum at a rate of 10 kg active ingredient (a.i.) ha -1 per application. Each treatment had hydrologicallyisolated plots 12 m wide × 15m long with separate mole-pipe drainage systems from which drainage waters were collected and analysed for nitrate and ammonium over a 4-year period. Pasture production, grass N uptake, grass nitrate-N concentrations and DCD losses in drainage were also measured over this period. The application of DCD showed a clear and consistent trend in reducing concentrations of nitrate-N in autumn and early winter drainage. On an annual basis, the application of DCD reduced the amounts of N lost in drainage by between 21 and 56%, depending on the year of study. Calculated mean annual losses of nitrate-N in drainage A08069; Online publication date 16 April 2009 Received 29 October 2008 accepted 25 March 2009 over the 4-year period were 12.9 kgNha -1 from the control and 6.8 kg N ha -1 from the DCD treatments (P < 0.05), with the greatest losses in the May-July period. The application of DCD had no significant effect on annual or seasonal pasture production across all measurement years, with pasture yields in the DCD-treated plots being less than 1% greater than those observed in the control plots. The application of DCD had little consistent effect on the botanical composition of the sward. Cost-benefit analysis suggests that the small pasture responses observed at this site would not cover the costs of applying DCD unless there were additional benefits such as a carbon credit for reduced nitrous oxide emissions. The application of DCD had the additional benefit of lowering grass nitrate-N concentrations on 22 of the 31 measurement dates. Between 2 and 16% of the DCD applied annually to the +DCD treatment was lost in drainage, representing c. 7% of applied DCD over the 4 years of measurement. Based on measured soil temperatures at this site and the observed monthly pattern of N loss in drainage, it is suggested that the scheduling of two autumn applications of DCD (e.g., at the March and May grazings) is the most effective strategy for minimising N losses in drainage at this site.