In agriculture‐dominated watersheds where natural drainage is poor, agricultural ditches (narrow engineered channels) and tile drains (perforated pipes) are widely employed to enhance surface and subsurface drainage, respectively. Despite their relatively small scale, these features exert substantial control over the hydro‐biogeochemical function of watersheds and their effects need to be represented in the models. We introduce a novel strategy to incorporate the effects of artificial agricultural drainage into a fully distributed basin‐scale integrated surface‐subsurface hydrology models. In our approach, narrow agriculture ditches for surface drainage are resolved efficiently using ditch‐aligned computational meshes that are hydrologically conditioned to ensure connectivity in the stream/ditch network. For tile drainage in the subsurface, we use the physically based Hooghoudt's drainage equation as a subgrid model and route the water drained through tiles to the nearest ditch. Without site‐specific calibration, this model reproduced observed streamflow in the Portage River Watershed (>1,000 km2) as recorded by a USGS gauge with good accuracy (normalized KGE = 0.81) and outperformed a calibrated SWAT model (normalized KGE = 0.68). Numerical experiments confirm that artificial drainage reduces surface inundations and effectively controls the water table. At the watershed scale, artificial drainage increases baseflow but has little effect on watershed discharges above the 90th percentile. The strong physical underpinnings and reduced need for calibration allow us to study the impacts of artificial drainage on distributed hydrological response in terms of fluxes and states and provide a platform for investigating watershed‐scale nutrient transport.