According to the experimental practice of soil and water conservation of small watershedin the upper and middle reaches of the Yellow River,the paper systematically exploited the hotpoint of soil and water conservation for developing small watershed economy.Developing small wa-tershed economy will make much more positive function to enhance intemal vitality of soil and waterconservatoin, to raise land productivity and make peasants get rid of poverty.In the meantime,thereare many favourable conditions.So the opportunity of dovcloping small watershed economy tends toripen.In the course of practice, we must make great effort in changing ideas, disposing resources, in-creasing scientific and technical level,and doing well in public services.Thus achievements will beobtained.