Biomass crops are being promoted as environmentally favorable alternatives to fossil fuels or ethanol production from maize (Zea mays L.), particularly across the Corn Belt of the United States. However, there are few if any empirical studies on inorganic N leaching losses from perennial grasses that are harvested on an annual basis, nor has there been empirical evaluation of the hydrologic consequences of perennial cropping systems. Here we report on the results of 4 yr of field measurements of soil moisture and inorganic N leaching from a conventional maize-soybean [Glycine max (L.) Merr.] system and two unfertilized perennial grasses harvested in winter for biomass: Miscanthus x giganteus and switchgrass (Panicum virgatum cv. Cave-in-Rock). All crops were grown on fertile Mollisols in east-central Illinois. Inorganic N leaching was measured with ion exchange resin lysimeters placed 50 cm below the soil surface. Maize--soybean nitrate leaching averaged 40.4 kg N ha(-1) yr(-1), whereas switchgrass and Miscanthus had values of 1.4 and 3.0 kg N ha(-1) yr(-1), respectively. Soil moisture monitoring (to a depth of 90 cm) indicated that both perennial grasses dried the soil out earlier in the growing season compared with maize-soybean. Later in the growing season, soil moisture under switchgrass tended to be greater than maize-soybean or Miscanthus, whereas the soil under Miscanthus was consistently drier than under maize--soybean. Water budget calculations indicated that evapotranspiration from Miscanthus was about 104 mm yr(-1) greater than under maize-soybean, which could reduce annual drainage water flows by 32% in central Illinois. Drainage water is a primary source of surface water flows in the region, and the impact ofextensive Miscanthus production on surface water supplies and aquatic ecosystems deserves further investigation.