Watershed restoration requires careful assessment of impairment in ecosystem attributes to design appropriate conservation policies. This study applies a multiattribute optimization framework for evaluating relative gains in restoration based on potential improvements in economic and environmental attributes related to water quality, habitat, and urbanization. Policy mechanisms through direct compensation of restoration activities are evaluated based on single-attribute and multiattribute optimization and watershed response to varying levels of restoration incentives. Results indicate that tradeoffs in economic and environmental objectives are critical to identifying optimal restoration strategies at a watershed scale. The multiattribute optimization method developed in this study balances levels of multiple attributes and reflects tradeoffs in preferences for each attribute. Through an evaluation of a variety of attributes for relative gains and costs, opportunities exist for strategic selection of restoration activities in subwatersheds. The multiattribute method is found to be superior to the single-objective method in incorporation of tradeoffs, balancing economic and environmental impacts, and development of participatory solutions. Multiattribute assessment and policies are important for cost-effective and consensus-based watershed restoration practices.