Potential economic and environmental benefits of increasing nitrogen-use efficiency (NUE) are widely recognized but scarcely quantified. This study quantifies the effects of increased NUE on 1) the national agricultural economy using a simulation model of US agriculture and 2) regional water quality effects using a biogeochemical model for the Arkansas-White-Red river basin. National economic effects are reported for NUE improvement scenarios of 10%, 20%, 50%, and 100%, whereas regional water quality effects are estimated for a 20% NUE improvement scenario in the Arkansas-White-Red river basin. Simulating a 20% increase in NUE in row crops is shown to reduce N requirements by 1.4 million tonnes y−1 and increase farmer net profits by 1.6% ($743 million) per year by 2026 over the baseline simulation for the same period. For each 10% increase in NUE, annual farm revenues for commodity crops increased over the baseline by approximately $350 million per year by 2026. Changes in crop prices and land-use relative to the baseline were less than 2%. This suggests a net benefit even though fertilizer cost savings can result in increased cultivation of land, i.e., ‘Jevon's paradox’. Results from the biogeochemical model of the Arkansas-White-Red river basin suggest that a 20% increase in NUE corresponds to a 5.72% reduction in nitrate loadings to freshwaters, with higher reductions in agricultural watersheds. The value of these reductions was estimated as $43 ha−1, for a total of $15.3 to 136.7 million yr−1 in avoided water treatment costs. After estimating the social value of increased NUE, we conclude with a discussion of potential strategies to increase efficiency and the research needed to achieve this goal. These include perennialization of the agricultural landscape, genetic crop improvement, targeted fertilizer application, and manipulation of the plant-root microbiome.