Abstract: Smallriverwatersheds are the main water sources and important ecological barriers of lakes. Water environment of the watersheds are deteriorating along with social and economic development. In this paper, a typical small watershed around Fuxian Lake, the Jianshan river watershed was studied as an example. Firstly, the status of water environment and the causes of pollution were analyzed. Then countermeasures on environmental management in the watershed was discussed with a focus on forestry ecological restoration, soil erosion control, agricultural nonpoint source pollution control, comprehensive improvement of the rural environment, and water purification of lake inlet. The paper gave some implication for the management of similar river watersheds of plateau lakes in Yunnan province.