The Southern High Plains (SHP) of Texas, where cotton (Gossypium hirsutum L.) is grown in vast acreage, and the Texas Rolling Plains (TRP), which is dominated by an invasive brush, honey mesquite (Prosopis glandulosa) have the potential for biofuel production for meeting the U.S. bioenergy target of 2022. However, a shift in land use from cotton to perennial grasses and a change in land management such as the harvesting of mesquite for biofuel production can significantly affect regional hydrology and water quality. In this study, APEX and SWAT models were integrated to assess the impacts of replacing cotton with Alamo switchgrass (Panicum virgatum L.) and Miscanthus 9 giganteus in the upstream subwatershed and harvesting mesquite in the downstream subwatershed on water and nitrogen balances in the Double Mountain Fork Brazos watershed in the SHP and TRP regions. Simulated average (1994)(1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009) annual surface runoff from the baseline cotton areas decreased significantly (P < 0.05) by 88%, and percolation increased by 28% under the perennial grasses scenario compared to the baseline cotton scenario. The soil water content enhanced significantly under the irrigated switchgrass scenario compared to the baseline irrigated cotton scenario from January to April and August to October. However, the soil water content was depleted significantly under the dryland Miscanthus scenario from April to July relative to the baseline dryland cotton scenario. The nitrate-nitrogen (NO 3 -N) and organic-N loads in surface runoff and NO 3 -N leaching to groundwater reduced significantly by 86%, 98%, and 100%, respectively, under the perennial grasses scenario. Similarly, surface runoff, and NO 3 -N and organic-N loads through surface runoff reduced significantly by 98.9%, 99.9%, and 99.5%, respectively, under the post-mesquite-harvest scenario. Perennial grasses exhibited superior ethanol production potential compared to mesquite. However, mesquite is an appropriate supplementary bioenergy source in the TRP region because of its standing biomass and rapid regrowth characteristics.