The focus of this article is to contribute to the financing component of watershed governance. We developed an approach to objectively investigate financing mechanisms and engage local governments into discussions about how they can generate revenue collaboratively to address problems that extend beyond their territory. With respect to watershed protection, the “revenueshed” approach takes into consideration those local governments that directly impact the watershed (upstream land users), as well as those that benefit from the watershed (water users outside the watershed). Water quality rules and regulations place water quality improvement responsibilities on local governments inside the watershed. The revenueshed approach extends the financial and stewardship discussion to include local governments that directly benefit from the watershed, even if they are located outside of the watershed.