Having harnessed comprehensively for years, Beizhuanghe watershed has changed greatly in biological environment and social features, soil loss and erosion have reduced obviously. The total pure incomes (TPI) are 183,800、201,000、317，500、 446,700 and 596,700 yuan respectively from 1981 to 1985. According to the GM(1，1)with grey system theory, it is predicted that the TPI during 1986-1990 will be 0.8212、1.1479、1,6046、2.2431,and 3.1356 million yuan respectively. The prediction results would be reliable and satisfying if no disastrous weather or unforseen inoutcome arised.