Water quality problems continue to plague our nation, even though Congress passed the Clean Water Act (CWA) to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters"1 more than three decades ago. During the past thirty years, the dominant sources of water pollution have changed, requiring us to seek new approaches for cleaning up our waters. Water quality trading has been heralded as an approach that can integrate market mechanisms into the effort of cleaning up our water. This Article examines the Environmental Protection Agency's (EPA) policy on water quality trading and the prospects for water quality trading to help improve water quality. Part II briefly describes our water quality problems and causes. Part III examines the theoretical basis for trading and the EPA's Water Quality Trading Policy. Part IV discusses the potential impact of total maximum daily loads (TMDLs) on water quality trading, and Part V analyzes potential problems that water quality trading programs confront. Part VI addresses distributional and efficiency concerns that arise when considering trading and agricultural nonpoint source pollution. Part VII then examines issues relating to water quality trading and state laws before reaching conclusions and recommendations in Part VIII.