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Study region: Oil palm cultivation has rapidly expanded worldwide due to demands for food oils and the potential for liquid fuel production. However, there is a scarcity of research on the hydrologic impacts of oil palm plantations at a watershed scale, especially in Latin America. We focus on a watershed typical of intensive palm oil production in Tabasco, Mexico. Study focus: A Soil and Water Assessment Tool model was calibrated to simulate long-term streamflow in the study watershed. The plant growth module was calibrated for leaf area index (LAI) and fruit yield simulations. Oil palm development scenarios were simulated to investigate the impacts of planting density and converted land cover types. New hydrological insights for the region: Oil palm evapotranspiration rates were 51 % higher on average than the converted land covers. The higher water use reduced mean annual streamflow by only 9% at the watershed scale, due to high precipitation in the upper watershed. In contrast, a 15 % decline in annual water yield was simulated in the converted areas of the watershed. Corresponding streamflow reductions in low-flow months were on average 34 %. A planting density of 150 palm/ha was the most efficient for water use and fruit production, giving a green water footprint for producing biodiesel of 87 m³ /GJ energy, similar to oil palm cultivation elsewhere in the world. Inglés