New domestic, renewable energy resources must be considered to increase energy security in the U.S. Ethanol production through second-generation (cellulosic) feedstocks will help the U.S. meet the legislative Renewable Fuel Standard, which mandates 36 billion gallons of renewable fuels by 2022. However, conversion of cropland to meet the cellulosic feedstock production goals may have unforeseen environmental consequences. Using Soil Water Assessment Tool (SWAT) outputs and National Agricultural Statistics Service (USDA NASS) economic data, we conducted a spatial optimization of bioenergy feedstock introduction into the Arkansas White-Red River Basin based on water quality and economic objectives, subject to constraints on total land conversion. Results displayed tradeoffs between bioenergy yield for three crops (switchgrass, sorghum and poplar) and land rent objectives. Optimal solutions tended to prioritize conversion of land in eastern AWR subbasins where yield and water quality objective improvements were greatest. A small number of subbasins contributed to basin-wide water quality improvements, whereas subbasins contributing to economic benefits were more spatially dispersed, indicating that water quality responses are more likely to constrain feedstock placement. Biomass production targets can be met vianumerous spatial arrangements, whereas marginal improvement in water quality objectives can best be achieved by selectively siting perennial feedstocks in the eastern half of the region.