The practice of controlled drainage (or, drainage water management) is a recognized conservation drainage practice where reduction in flow volume and corresponding nitrogen (N) loads occur via management of water control structures. However, if this subsurface water management causes lateral seepage to occur, nutrient load reductions could be overestimated if nutrients are simply redirected to a neighboring free drainage outlet. The objective of this study was to develop seepage-corrected N loss reduction estimates provided by the practice of controlled drainage at two sites in Illinois. Drainage flow and N loss from the outlet were monitored for three years at: (1) 0.8 ha free and controlled drainage plots at a University of Illinois Research Farm and (2) a private farm in Illinois with a multi-zone controlled drainage system. Seepage across field boundaries at these two sites was assessed using Dupuit's Formula. Annual N loss reductions comparing the controlled versus free drainage research plots were 41, 93, and 80%. There was no free drainage control at the private farm but measured losses of 2.3, 5.1, and 0.3 kg N/ha provided reductions of 90, 78, and 99% compared to a free drainage average of 23 kg N/ha from literature. Seepage across field boundaries ranged from 8% to as high as 89% of the total subsurface outflow calculated as the drainage measured at the outlet plus estimated seepage. Assuming a worst-case scenario that N in seepage water was not uptaken or denitrified, annual N loss reductions were corrected to account for the fraction of total outflow leaving the field as drainage. This resulted in annual N loss reductions ranging from 11-73% rather than 41-99% for these six site-years.