[Objective] The objective of this study is to quantitatively analyze the effects of terrace on river runoff and ecological basic flow(EBF) of Jinghe watershed in Loess Plateau region, to provide theoretical supports for construction of terraces in the watershed.[Methods] The process-based terrace algorithm was developed based on soil and water assessment tool(SWAT) model to simulate river runoff.[Results] The developed model satisfied the accuracy requirements in runoff simulation. With the increase of terrace area, annual runoff and number of days when runoff less than EBF were reduced, and the security level of EBF enhanced dramatically. Terrace could reduce runoff by as much as 4.25×10⁴ m³/(km²·a). Moreover, terrace could adjust the flood and runoff, and this adjustment effect on runoff in wet season was higher than that in dry season. The effects of terrace on EBF showed as:dry season >the normal season >the wet season.[Conclusion] The newly developed terrace algorithm is satisfactory in simulating daily runoff in Jinghe watershed. Increasing terraced area is an effective way to adjust runoff in both wet and dry seasons, and guarantee EBF.