International attention has focused on agricultural production systems as nonpoint sources of pollution affecting the quality of streams, estuaries and ground water resources. The objective of the current study was to develop a model of nitrogen management on the dairy farm, and to perform sensitivity analyses in order to determine the relative importance of manipulating herd nutrition, manure management and crop selection in reducing nitrogen (N) losses from the farm. The importance of the method of N input to the farm (purchased feed, legume fixation, inorganic fertilizer, imported manure) was investigated, and the potential to reduce N losses from dairy farms was evaluated. Nitrogen balance equations were derived, and related efficiency coefficients were set to reference values representing common management practices. Total farm N efficiency (animal product N per N input), and N losses per product N were determined for different situations by solving the set of simultaneous equations. Improvements in animal diet and management that increase the conversion of feed N to animal product by 50% would increase total farm N efficiency by 48% and reduce N losses per product by 36 to 40%. In contrast, reducing losses from manure collection, storage and application to improve the percentage of manure N that becomes available in soil by 100% would only improve total farm N efficiency by 13% and reduce total N losses by 14%. Selecting crops and management that can use soil nutrients 50% more efficiently would improve total farm efficiency by up to 59% and reduce N losses by up to 41% depending on the predominant nitrogen sources to the farm. Legume production would reduce N losses per product compared with non-legumes. There was more than a five fold difference in N losses per animal product N between the most extreme scenarios suggesting considerable opportunity to reduce N losses from dairy farms.