Soil and Water Assessment Tool (SWAT) ver. 2005 was applied to study water balance and nitrogen load pathways in a small agricultural watershed in the lowlands of central Poland. The natural flow regime of the Zgłowiączka River was strongly modified by human activity (deforestation and installation of a subsurface drainage system) to facilitate stable crop production. SWAT was calibrated for daily and monthly discharge and monthly nitrate nitrogen load. Model efficiency was tested using manual techniques (subjective) and evaluation statistics (objective). Values of Nash–Sutcliffe efficiency coefficient (NSE), coefficient of determination (R2) and percentage of bias for daily/monthly discharge simulations and monthly load indicated good or very good fit of simulated discharge and nitrate nitrogen load to the observed data set. Model precision and accuracy of fit was proved in validation. The calibrated and validated SWAT was used to assess water balance and nitrogen fluxes in the watershed. According to the results, the share of tile drainage in water yield is equal to 78%. The model analysis indicated the most significant pathway of NO3-N to surface waters in the study area, namely the tile drainage combined with lateral flow. Its share in total NO3-N load amounted to 89%. Identification of nitrogen fluxes in the watershed is crucial for decision makers in order to manage water resources and to implement the most effective measures to limit diffuse pollution from arable land to surface waters.