This article explores the issue of multiple externalities through a case study of irrigated agricultural production in eastern Oregon. A mathematical programming model is used to demonstrate the manner in which a policy directed at one externality (soil erosion) may influence the incidence of another externality (groundwater pollution). A key determinant of multiple externality outcomes is interdependence in the processes producing agricultural commodities and externalities. Potential benefits from coordinating a policy to address multiple environmental objectives are discussed. ¿ American Geophysical Union 1995