Competition for natural resources between various stakeholders within the same geographicalarea is becoming a reality. An integrated, multidisciplinary modeling approach is neededto efficiently manage these resources. A watershed management approach, using hydrologicmodeling, enjoys ample acceptance in coastal areas and small islands because of the smallsizedwatersheds in these areas. Water quality and quantity are essential parts of thelivelihood of these areas. A deep understanding of watershed hydrolog y and water qualityis necessary for sustainable planning, management, and protection of natural resources. Hydrologic models offer practical tools for watershed management as they optimise twoprecious assets - time and money. These models lessen the number of field experiments required to implement and underscore major parameters and variables that most influencethis system. This chapter summarises the results of evaluating the performance of AnnAGNPS(Annualised Agricultural Nonpoint Source Pollution) and N-SPECT (Nonpoint SourcePollution and Erosion Comparison Tool) under tropical and coastal watershed settings. The models identified "hotspots" to be targeted to enhance watershed sustainability. Themodels were found to have strong potential in simulating the runoff and sediment load fromthe Hanalei River Basin in Kaua'i, Hawai'i. However, these models need to be improvedto make their predictions and capabilities in watersheds of steep slope and spatially variablerainfall more precise. © 2010 Institute of Southeast Asian Studies, Singapore. All rights reserved.