In the European Union (EU) context, regulatory instruments and individual incentive schemes have been the main policy instruments implemented to control non-point source pollution from agriculture. There also exist some examples of voluntary cooperation among farmers to enhance water quality. However, there has been no systematic assessment of the costs and benefits of such agri-environmental cooperation. The article aims at assessing the potential of co-operative agreements for limiting diffuse nitrate pollution from agriculture. Transaction costs economics are used as a framework to assess the potential advantages of collective action as an alternative or a complement to other policy tools. To identify the conditions under which cooperation may be successful, we then use the Socio-Ecological Systems framework (Ostrom, 2009). A review of empirical studies relative to cases of collective action for agricultural water pollution prevention in the EU context serves as a basis for the identification of the factors likely to affect the success of cooperation for water quality management in agriculture. The analysis relies more particularly on two cases: The Environmental Co-operatives in the Netherlands and the Ferti-Mieux operations in France.