In 1995 a working group was assembled at the request of OECD/IPCC/IEA to revise the methodology for N2O from agriculture for the National Greenhouse Gas Inventories Methodology. The basics of the methodology developed to calculate annual country level nitrous oxide (N2O) emissions from agricultural soils is presented herein. Three sources of N2O are distinguished in the new methodology: (i) direct emissions from agricultural soils, (ii) emissions from animal production, and (iii) N2O emissions indirectly induced by agricultural activities. The methodology is a simple approach which requires only input data that are available from FAO databases. The methodology attempts to relate N2O emissions to the agricultural nitrogen (N) cycle and to systems into which N is transported once it leaves agricultural systems. These estimates are made with the realization that increased utilization of crop nutrients, including N, will be required to meet rapidly growing needs for food and fiber production in our immediate future. Anthropogenic N input into agricultural systems include N from synthetic fertilizer, animal wastes, increased biological N-fixation, cultivation of mineral and organic soils through enhanced organic matter mineralization, and mineralization of crop residue returned to the field. Nitrous oxide may be emitted directly to the atmosphere in agricultural fields, animal confinements or pastoral systems or be transported from agricultural systems into ground and surface waters through surface runoff. Nitrate leaching and runoff and food consumption by humans and introduction into sewage systems transport the N ultimately into surface water (rivers and oceans) where additional N2O is produced. Ammonia and oxides of N (NOx) are also emitted from agricultural systems and may be transported off-site and serve to fertilize other systems which leads to enhanced production of N2O. Eventually, all N that moves through the soil system will be either terminally sequestered in buried sediments or denitrified in aquatic systems. We estimated global N2O–N emissions for the year 1989, using midpoint emission factors from our methodology and the FAO data for 1989. Direct emissions from agricultural soils totaled 2.1 Tg N, direct emissions from animal production totaled 2.1 Tg N and indirect emissions resulting from agricultural N input into the atmosphere and aquatic systems totaled 2.1 Tg N2O–N for an annual total of 6.3 Tg N2O–N. The N2O input to the atmosphere from agricultural production as a whole has apparently been previously underestimated. These new estimates suggest that the missing N2O sources discussed in earlier IPCC reports is likely a biogenic (agricultural) one.