Incorporating managed rotational grazing into a dairy farm can result in an array of environmental consequences. A comprehensive assessment of the environmental impacts of four management scenarios was conducted by simulating a 250-acre dairy farm typical of Pennsylvania with: (i) a confinement fed herd producing 22,000 lbs of milk per cow per year; (ii) a confinement fed herd producing 18,500 lbs; (iii) a confinement fed herd with summer grazing producing 18,500 lbs; and (iv) a seasonal herd maintained outdoors producing 13,000 lbs. Converting 75 acres of cropland to perennial grassland reduced erosion 24% and sediment-bound and soluble P runoff by 23 and 11%, respectively. Conversion to all perennial grassland reduced erosion 87% with sediment-bound and soluble P lossess reduced to 80 and 23%. Ammonia volatilization was reduced 30% through grazing but nitrate leaching loss increased up to 65%. Grazing systems reduced the net greenhouse gas emission by 8 to 14% and the C footprint of an all grassland farm up to 80% during the transition from cropland. The environmental benefits of grass-fed dairy production should be used to encourage greater adoption of managed rotational grazing in regions where this technology is well adapted.