[Objective] The objective of the study is to assess the impact of soil and water conservation on industrial development in source areas of the middle route of south-to-north water diversion project to provide the support for the conservation planning and industrial development strategy.[Methods] This paper selects the water source area in Shaanxi Province as a case study area, and used AHP(analytic hierarchy process) method to build an index system for the assessment of impact of soil and water conservation on the industrial development in Southern Shaanxi Province. Through constructing the interval judgment matrix of indexes and determining the relative weight of indexes at all levels, we evaluated the the impact of soil and water conservation of the south-to-north water diversion project on development of the main forest industries in Southern Shaanxi Province.[Results] The score of the regional industry follows an order as Liuba, Danfeng, Ningqiang, Baihe, Shangnan, Xunyang, Zhenan, Yangxian and Ningshan County.[Conclusion] Our study proves that in some typical areas of soil and water conservation industrial development and the soil and water conservation investment is positively related.