Desertification is the consequence of a set of important processes which are active in arid and semi-arid environments, where water is the main limiting factor of land use performance in ecosystems. In the context of the EC MEDALUS (Mediterranean Desertification and Land Use), the focus here is primarily on European Mediterranean environments where physical loss of soil by water erosion, and the associated loss of soil nutrient status is identified as the dominant problem. In more arid areas, there is greater concern with wind erosion and salinisation problems, but these are considered to be less significant than water erosion for the northern Mediterranean area. The proposed methodology at this scale is through the identification of Environmentally Sensitive Areas (ESA’s) through a multi-factor approach based on both a general and a local knowledge of the environmental processes acting. This work focuses on the choice of appropriate indicators at the European/National (RDI) and Regional (ESAs) scales; and illustrates their application to identifying ESAs for three target areas defining during the execution of MEDALUS Project and located in Greece (the island of Lesvos), Italy (the Agri basin in Basilicata), and Portugal (Alentejo region).