Perennial grasses are being considered as candidates for biofuel feedstocks to provide an alternative energy source to fossil fuels. Miscanthus×giganteus (miscanthus), in particular, is a grass that is predicted to provide more energy per sown area than corn ethanol and reduce net carbon dioxide emissions by increasing the storage of carbon belowground. Miscanthus uses more water than Zea mays (maize), mainly as a result of a longer growing season and higher productivity. Conversion of current land use for miscanthus production will likely disrupt regional hydrologic cycles, yet the magnitude, timing, and spatial distribution of effects are unknown. Here, we show the effects of five different scenarios of miscanthus production on the simulated Midwest US hydrologic cycle. Given the same historic precipitation observations, our ecosystem model simulation results show that on an annual basis miscanthus uses more water than the ecosystems it will likely replace. The actual timing and magnitude of increased water loss to the atmosphere depends on location; however, substantial increases only occur when miscanthus fraction cover exceeds 25% in dry regions and 50% in nearly all of the Midwest. Our results delineate where large-scale land use conversion to perennial biofuel grasses might deplete soil water resources. Given the fact that some watersheds within the Midwest already have depleted water resources, we expect our results to inform decisions on where to grow perennial grasses for biofuel use to ensure sustainability of energy and water resources, and to minimize the potential for deleterious effects to water quantity and quality.