The major areas of key harnessed small watersheds in Taihang mountain of Hebei province were investigated in order to study the economic development patterns of the area. Based on the rock characteristics, geographical position and topographical conditions, four types of the small watershed areas were divided, i.e, the gneiss small watershed type in the west deep mountain area, the gneiss small watershed type in the east shallow area, the limestone small watershed type in the steep slope area, and the limestone small watershed type in the gentle slope area. Land use structure, industrial structure and investment structure of the four types of small watershed area were analyzed with multiple linear regression and gray forecast theory. Optimum patterns of economic development for the different types of small watershed area were also worked out.