The paper discusses theories and methods of small watershed land utilization plan, four study programmes is posed, firstly analyzing economic system of small watershed, making clear different function of different location of small watershed and trouble; secondly according to natural and social economical feature, studying natural suitability, analysis of economical system input output reveals superiority of agricultural development, decide best agricultural structure of product and optimal goals; thirdly goal programming defines quantitative structure; finally theory and method of landscape ecology define space structure; which will optimize collocation of land resource of small watershed, exerting function and potential of land resource, achieving the goal of small watershed sustainable development.