Establishing an ecological compensation mechanism can not only mobilize the enthusiasm of participants in ecological protection of water sources，but also can achieve a win-win situation for the ecological protection of water sources and economic development，and ensure the improvement of ecological environment and water supply security in the reservoir area.Taking the drinking water source of Shankouyan Reservoir in Pingxiang city as an example，through analysis of the current situation of environmental pollution in water sources and conflicts between water conservation and local economic development，the necessity of establishing an ecological compensation mechanism was discussed，and the main body and object of the ecological compensation for the water source of Shankouyan Reservoir were defined.By combining the cost analysis method，the opportunity cost method with the willingness to pay method，a quantitative analysis of the compensation amount was carried out，and some suggestions for the compensation method and approach were put forward finally.