An approach is present which integrates an economic and an ecological model for designing cost-effective compensation payments for conservation of endangered species in real landscapes. The approach is used to develop a cost-effective compensation payment scheme for conservation of an endangered butterfly species (Maculinea teleius) protected by the EU Habitats Directive in the region of Landau, Germany. The economic model determines the costs of relevant conservation measures mowing meadows at different times and frequencies - and the ecological model quantifies the effects of these mowing regimes on the butterfly population. By comparing the ecological effects of different mowing regimes, the cost-effective regime and the corresponding payments are determined as a function of the conservation budget. The results of the case study are used to analyse the effect of metapopulation dynamics on the cost-effectiveness of compensation payment schemes, to evaluate an existing scheme in the region of Landau and to draw conclusions for the institutional design of payment schemes.