Environmental settings were defined, through an overlay process, as areas of coincidence between categories of three mapped variables - land use, surficial geology, and soil drainage characteristics. Expert judgment was used in selecting factors thought to influence sediment and nutrient concentrations in the Albemarle-Pamlico drainage area. This study's findings support the hypothesis that environmental settings defined using these three variables can explain variations in the concentration of certain sediment and nutrient constituents. This finding underscores the importance of developing watershed management plans that account for differences associated with the mosaic of natural and anthropogenic factors that define a basin's environmental setting. At least in the case of sediment and nutrients in the Albemarle-Pamlico region, a watershed management plan that focuses only on anthropogenic factors, such as point-source discharges, and does not account for natural characteristics of a watershed and the influences of these characteristics on water quality, may lead to water-quality goals that are over- or underprotective of key environmental features and to a misallocation of the resources available for environmental protection.