Abstract: Relationship between land use change and supply of ecological services is a key for payments of environmental services. Based on payments for environmental services in upper stream of Heihe River Basin, the effect of payments prices change on the ratio of grazing prohibition and its provision of water conservation services was analyzed. The results showed as following: 1) the average expected rate of water conservation services between grazing and grazing prohibition was 25.27 m3/hm2; 2) the constructed SWAT model was shown well to simulate hydrology processes in upper stream of Heihe River basin and relative error of average annual discharges reached 16.3% and 15.6%, Ens reached 0.81 and 0.88 and R2 reached 0.94 and 0.93 in the model calibration and verification period respectively; 3) difference of opportunity cost in grazing prohibition existed in each sub-basin, and the average opportunity cost in grazing prohibition was 289.99 Yuan/hm2; 4) the additional ratio of grazing prohibition and the supply of water conservation services were difference when the payments were different. When all low-quality grassland shifted from grazing to grazing prohibition the total supply of water conservation services amounted to 7.79×108 m3 and the additional services could reach 7.66×108 m3 during 1990 and 2000. This paper provides a scientific foundation for determination of compensation standard and space choice of ecological compensation object.