Anaerobic digestion of manure for biogas production is one option for reducing the carbon footprint of milk production. This process reduces greenhouse gas emissions but increases the potential for nitrogen and phosphorus losses from the farm. A digester component was added to the Integrated Farm System Model to obtain a tool for comprehensive evaluation of the various effects of using this technology on dairy farms. A dairy farm in New York was simulated for 25 years of weather with and without the use of a digester. Farm records were used to verify simulated feed production and use, milk production, biogas production, and electric generation and use. Methane emission from the manure storage was reduced 71%, which reduced the whole-farm emission by 20%. Energy saved in water heating and purchased electricity reduced combustion and secondary carbon dioxide emissions by 9% and 11%, respectively. Over all farm sources and sinks, the digester reduced the net greenhouse gas emission and farm gate carbon footprint by 25 to 30% with a small increase in ammonia emission. Without financial assistance, there was no direct economic benefit to the producer, but benefits of reduced odor and a lower carbon footprint were obtained without much reduction in farm profit. Whole-farm simulation provides a useful tool for evaluating and comparing management options to reduce the environmental footprint of farm production systems.