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Safe distribution of water from source to tap is a major concern in Ontario after the Walkerton tragedy. The Nutrient Management Act and Source Water Protection Act in Ontario are being planned to protect the quality of water resources by controlling pollutant transport from upland contributing areas. To achieve the objective of providing safe, clean, and affordable water supply and aquatic ecosystem, it is essential to assess the contribution of pollution from different sources to the stream. While source water protection is a major issue in Ontario, a number of watershed models are being used by different agencies to mitigate the water quality and quantity problems. The Guelph Watershed Research Group at the University of Guelph is also assessing the performance of different watershed models to best apply in Ontario conditions. This study has investigated the hydrology and sediment output from two widely used watershed models (SWAT and AnnAGNPS). The models are daily time step, watershed scale, pollutant-loading model developed to simulate long-term runoff, sediment, and chemical transport from agricultural watersheds. The models were run for a period of ten years (1991-2000) and the output data for the first five years (1991-1995) were used to calibration and that for the last five years data (1996-2000) for validation. The results of the study indicate that the models performed fairly well in simulating the runoff and sediment yield for Ontario conditions. For annual water balance, the model underpredicted the evapotranspiration, but the average difference was under acceptable range (3.1% for AnnAGNPS and 11.2% of SWAT). For surface runoff, the average difference between the observed and simulated annual runoff for the calibration period was 2.1% for AnnAGNPS, and 4.5% for SWAT model. The deviations for validation period were 1.8% for AnnAGNPS and 18.8% for the SWAT model. The Nash-Sutcliffe coefficients for monthly outputs were 0.79 for AnnAGNPS and 0.7 for AnnAGNPS in the calibration phase and 0.69 for AnnAGNPS and 0.57 for SWAT model for the validation phase. A significant challenge in calibrating and validating the sediment portion of the model was a shortage of observed sediment data, which might have lead to the over prediction of sediment yield by both the models during validation period. A detailed evaluation of SWAT model on the watershed is still in progress and the output for SWAT might be improved once the work is completed.