Using approaches of literature review, empirical analysis and comparison analysis, the opportunity cost of the upper reaches of Qiupuhe River in 2009 was estimated as of 6.02 X 108 yuan with the opportunity cost method, and the maximum willingness to pay(WTP) was 5.62 X 107 yuan with the contingent vale meth-od(CVM). According to the calculations, the advantages and disadvantages of the two methods were ana-lyzed in details. Based on the semi-efficient market theory and the ecological concept of time-space, the whole compensation process could be divided into two stages, initial compensation and final compensation. The difference between direct economic benefit and ecological preservation cost was set as the initial compensa-tion, which was estimated as of 2.35 X 108 yuan for the study area. The final compensation is total value of the opportunity cost.