Agri-Environment Schemes (AES) to maintain or promote environmentally-friendly farming practices were implemented on about 25% of all agricultural land in the EU by 2002. This article analyses and discusses the actual and potential use of impact models in supporting the design, implementation and evaluation of AES. Impact models identify and establish the causal relationships between policy objectives and policy outcomes. We review and discuss the role of impact models at different stages in the AES policy process, and present results from a survey of impact models underlying 60 agri-environmental schemes in seven EU member states. We distinguished among three categories of impact models (quantitative, qualitative or common sense), depending on the degree of evidence in the formal scheme description, additional documents, or key person interviews. The categories of impact models used mainly depended on whether scheme objectives were related to natural resources, biodiversity or landscape. A higher proportion of schemes dealing with natural resources (primarily water) were based on quantitative impact models, compared to those concerned with biodiversity or landscape. Schemes explicitly targeted either on particular parts of individual farms or specific areas tended to be based more on quantitative impact models compared to whole-farm schemes and broad, horizontal schemes. We conclude that increased and better use of impact models has significant potential to improve efficiency and effectiveness of AES.