Compensatory mitigation for damages to wetlands in the United States o
ccurs largely without explicit analysis and replacement of wetland fun
ctions. We offer an approach to standardize such analyses and strength
en the connection between ecological principles and policies for wetla
nd resources. By establishing standards from reference wetlands chosen
for their high level of sustainable functioning, gains and losses of
functions can be quantified for wetlands used in compensatory mitigati
on. Advantages of a reference wetland approach include (1) making expl
icit the goals of compensatory mitigation through identification of re
ference standards from data that typify sustainable conditions in a re
gion, (2) providing templates to which restored and created wetlands c
an be designed, and (3) establishing a framework whereby a decline in
functions resulting from adverse impacts or a recovery of functions fo
llowing restoration can be estimated both for a single project and ove
r a larger area accumulated over time. To establish reference standard
s, conditions inherent to highly functioning sites must be identified
for classes of wetlands that share similar geomorphic settings. Ecolog
ical functions are then identified, and variables used to model the fu
nctions are employed in developing reference standards. Variables rang
e from the highest levels of sustainable functioning to the complete a
bsence of functions when a wetland ecosystem is displaced. An example
given for wet pine flats in the North Carolina coastal plain illustrat
es how to determine the loss of a given function for an impacted wetla
nd, how to calculate recovery (gains) in function through compensatory
mitigation, and how to use the relationships between the two (loss vs
. gain in function) to set minimum replacement ratios of restored to i
mpacted area. In all cases, data from reference wetlands provide the b
enchmarks for making these estimates and for directing restoration or
creation of wetlands toward the standards established for the wetland
class. Programs to implement the use of reference wetlands require reg
ional efforts that build upon the knowledge base of existing wetlands
and their functioning.