To quantify the movement of atmospheric nitrogen deposition through two forested watersheds in the Catskill Mountains of New York, dual-isotope analysis (δ¹⁵N and δ¹⁸O) was used to differentiate NO₃⁻ derived from precipitation from NO₃⁻ derived by microbial nitrification and to quantify the contributions of these sources to NO₃⁻ in drainage waters. Samples of stream water, soil water, precipitation, snowmelt, and O-horizon soil were collected during the March and April snowmelt period of 1994 and throughout an 18-month period from August 1995 through February 1997. The mean δ¹⁸O-NO₃⁻ value of precipitation was +50.5‰, whereas the mean values for stream water and soil water were +17.7‰ and +23.6‰, respectively. The mean δ¹⁵N-NO₃⁻ of precipitation was −0.2‰, that of soil water was +1.4‰, and that of stream water was +2.3‰; these values showed greater overlap among the three different waters than did the δ¹⁸O-NO₃⁻ values, indicating that δ¹⁵N-NO₃⁻ was not as useful for source separation. Soil water δ¹⁸O-NO₃⁻ values decreased, and δ¹⁵N-NO₃⁻ values increased, from the O to the B and C horizons, but most of the differences among horizons were not statistically significant. Nitrate derived by nitrification in incubated soil samples had a wide range of δ¹⁵N-NO₃⁻ values, from +1.5‰ to +16.1‰, whereas δ¹⁸O-NO₃⁻ values ranged more narrowly, from +13.2‰ to +16.0‰. Values of δ¹⁸O-NO₃⁻ indicated that NO₃⁻ in stream water is mainly derived from nitrification. Only during a high-flow event that exceeded the annual flood was precipitation a major contributor to stream water NO₃⁻. Values of δ¹⁸O-NO₃⁻ and δ¹⁵N-NO₃⁻ changed at differing rates as NO₃⁻ cycled through these watersheds because δ¹⁸O-NO₃⁻ values change sharply through the incorporation of oxygen from ambient water and gas during nitrification, whereas δ¹⁵N-NO₃⁻ values change only incrementally through fractionation during biocycling processes. The results of this study show that most NO₃⁻ is first cycled through the biota and nitrified before entering the stream.