A case study of the Yorkshire Derwent (UK) catchment is used to illustrate an integrated approach for assessing the viability of policy options for reducing diffuse nitrate losses to waterbodies. For a range of options, modeling methods for simulating river nitrate levels are combined with techniques for estimating the economic costs to agriculture of modifying those levels. By incorporating spatially explicit data and information on catchment residence times (which may span many decades particularly in areas of groundwater discharge) a method is developed for efficient spatial targeting of measures, for example, to the most at-risk freshwater environments. Combining hydrological and economic findings, the analysis reveals that, in terms of cost-effectiveness, the ranking of options is highly sensitive to both (i) whether or not specific stretches of river within a catchment are regarded as a priority for protection, and (ii) the criterion of nitrate concentration deemed most appropriate as an indicator of the health of the environment. Therefore, given the focus under European legislation upon ecological status of freshwaters, these conclusions highlight the need to improve understanding of mechanistic linkages between the chemical and biological dynamics of aquatic systems.