Identification of critical source areas (CSAs) helps to reduce best management practices (BMPs) adoption cost to meet the desired level of water quality in a given watershed. We used Soil and Water Assessment Tool (SWAT) to identify critical source areas within the Saline Bayou Watershed (HUC 11140208), Louisiana. SWAT model was calibrated and validated for discharge and sediment pollution. We then followed up with MAPSHED to assess the effectiveness of implementing different best management practices to reduce nutrient and sediment pollution. Optimization results show that nutrient management and agricultural land retirement can reduce most of the phosphorus runoff in the watershed at the lowest cost. Results are robust to change in parameter sensitivity and alternative weather (dry, normal, and wet) scenarios.