Planted forests are increasing in area worldwide in recent decades and play an important role in carbon sequestration programs. However, the effects of plantations on water resources are largely unknown. Here, we investigate the effects of Eucalyptus sp. plantations on water budget fluxes in the southern Brazilian grasslands biome. We evaluated green (canopy interception and evapotranspiration) and blue (discharge) water flows in three watersheds: two watersheds predominantly covered with eucalyptus, either in the first years after planting or at the end of the rotation, and one watershed with livestock-grazing grassland. We used field measurements of rainfall, streamflow, and throughfall and estimated canopy interception and evapotranspiration by water balance. Water flows in the monitored watersheds with eucalyptus plantations were influenced by forest developmental stage. Annual canopy interception and transpiration were always higher in the watersheds with eucalyptus than in the one with grassland, except for the transpiration in the first year after plantation in the watershed with young eucalyptus. An increase in evapotranspiration (green water flow) and the consequent decrease in streamflow (blue water flow) should be considered in local water resource management. Studies of catchment hydrology and forest management for improved water use efficiency and streamflow regulation are needed, particularly in understudied regions.