The coterminous U.S. has lost more than 50% of its wetlands since colonial times. Today, wetlands are highly valued for many functions including temporary storage of surface water, streamflow maintenance, nutrient transformation, sediment retention, shoreline stabilization, and provision of fish and wildlife habitat. Government agencies and other organizations are actively developing plans to help protect, conserve, and restore wetlands in watersheds. The U.S. Fish and Wildlife Service's National Wetlands Inventory Program (NWI) has produced wetland maps, digital geospatial data, and wetland trends data to aid these and other conservation efforts. Most recently, the NWI has developed procedures to expand the amount of information contained within its digital databases to characterize wetlands better. It has also developed techniques to use these data to predict wetland functions at the watershed level. Working with the states of Delaware and Maryland, the NWI applied these techniques to the Nanticoke River watershed to aid those states in developing a watershed-wide wetland conservation strategy. Wetland databases for pre-settlement and contemporary conditions were prepared. An assessment of wetland functions was conducted for both time periods and comparisons made. Before European settlement, the Nanticoke watershed had an estimated 93,000 ha of wetlands covering 45% of the watershed. By 1998, the wetland area had been reduced to 62% of its original extent. Sea-level rise and wetland conversion to farmland were the principal causes of wetland loss. From the functional standpoint, the watershed lost over 60% of its original capacity for streamflow maintenance and over 35% for four other functions (surface-water detention, nutrient transformation, sediment and particulate retention, and provision of other wildlife habitat). This study demonstrated the value of enhanced NWI data and its use for providing watershed-level information on wetland functions and for assessing the cumulative impacts to wetlands. It provides natural resource managers and planners with a tool that can be applied consistently to watersheds and large geographic areas to show the extent of wetland change and its projected effect on wetland functions.