Abstract: On the basis of the ecological compensation success cases all over the country's, we can conclude that the market mechanism of the ecological compensation help solve the problem of insufficient funding in environmental protection. The key issues on building the market mechanisms of the water sources ecological compensation should include a clear subject of compensation, establishing compensation standards and improving the legal system of compensation, etc. Water source ecological compensation can be taken into account the opportunity cost of provider, the benefit level of the main beneficiaries, the paying ability, and the compensation stage， phases to determine sub-regional. Based on the benefit level of the main beneficiaries to determine the payment amount is unified collected by the local government and the local government on behalf of beneficiaries buys water rights to water resources management. To increase the awareness of ecological compensation beneficiaries, clear ownership of water resources, improve ecological compensation laws, regulations and the establishment of monitoring and coordination mechanism is the prerequisite to build of the long-term market mechanism.