The goal of the study was to model water quality impacts of growing perennial grasses on marginal soils. The GLEAMS-NAPRA and RUSLE models were used to simulate long-term surface runoff, percolation, erosion, total phosphorus (TP), and nitrate (NO3-N) losses associated with the production of corn-based bioenergy systems (i.e. conventional tillage corn and corn grain plus stover removal), switchgrass and Miscanthus on three marginal quality soils and one good quality soil in Indiana. Simulations showed that switchgrass and Miscanthus had no effect on annual runoff, but decreased percolation by at least 17%. Results also suggested a potential for reduction in erosion for Miscanthus across the soil types examined when compared to corn-based bioenergy production. The production of switchgrass and Miscanthus did not have significant effects on the simulated TP and NO3-N losses in runoff compared to corn production systems. Nitrates leached from fertilized Miscanthus production were approximately 90% lower than NO3-N leached from the production of fertilized switchgrass and corn systems. Additional studies are needed to better understand the hydrology, erosion and nutrient responses of Miscanthus and switchgrass production to meet bioenergy demands.