Poultry litter provides a rich source of nutrients for perennial forages, but the usual practice of surface-applying litter to pastures can degrade water quality by allowing nutrients to be transported from fields in surface runoff, while much of the NH4-N volatilizes. Incorporating litter into the soil can minimize such problems in tilled systems, but has not been used for perennial forage systems. In this study, we minimized disturbance of the crop, thatch, and soil structure by using a knifing technique to move litter into the root zone. Our objective was to determine effects of poultry litter incorporation on quantity and quality of runoff water. Field plots were constructed on a silt loam soil with well-established bermudagrass [Cynodon dactylon (L.) Pers.] and mixed grass forage. Each plot had 8 to 10% slopes, borders to isolate runoff, and a downslope trough with sampling pit. Poultry litter was applied (5.6 Mg ha(-1)) by one of three methods: surface-applied, incorporated, or surface-applied on soil-aeration cuts. There were six treatment replications and three controls (no litter). Nutrient concentrations and mass losses in runoff from incorporated litter were significantly lower (generally 80-95% less) than in runoff from surface-applied litter. By the second year of treatment, litter-incorporated soils had greater rain infiltration rates, water-holding capacities, and sediment retention than soils receiving surface-applied litter. Litter incorporation also showed a strong tendency to increase forage yield.