Community-based watershed initiatives (CBWIs) are commonly cited as an effective solution to cross-jurisdictional environmental management issues. However, the efficacy of this approach has not been proven. This study provides a method and example for planners to analyze the potential for CBWI indicators to be used in performance monitoring. This major paper includes a compilation of the criteria often cited in the literature as fundamental aspects of successful indicators. These criteria were operationalized using dichotomous variables, which allow qualitative traits to be quantified. This method was applied to the evaluation of EPA-recommended environmental indicators and indicators used by two CBWI case studies. The critical analysis of indicators was carried out according to the literature criteria for each category of indicator effectiveness, including scientific validity, practicality and programmatic considerations. Indicators were classified as condition, stress, activity or organization indicators. The strengths and weaknesses of each indicator were evaluated according to each category of indicator effectiveness and each indicator classification scheme. Based on the findings from these analyses, the indicators commonly used in these case studies are not sufficient for performance measurement of CBWI activities. By adopting the methodology outlined in this research, planners can determine specific weaknesses in the range of watershed indicators collected by various associations. In addition, this evaluation framework can enable planners to determine what measurements are needed to complement those collected so they can better support their environmental decision-making needs.