Several environmental protection policies have been implemented to prevent soil erosion and nonpoint source (NPS) pollutions in China. After severe Yangtze River floods, the "conversion cropland to forest policy" (CCFP) was carried out throughout China, especially in the middle and upper reaches of Yangtze River. The research area of the current study is located in Bazhong City, Sichuan Province in Yangtze River watershed, where soil erosion and NPS pollution are serious concerns. Major NPS pollutants include nitrogen (N) and phosphorus (P). The objective of this study is to evaluate the long-term impact of implementation of the CCFP on stream flow, sediment yields, and the main NPS pollutant loading at watershed level. The Soil and Water Assessment Tool (SWAT) is a watershed environmental model and is applied here to simulate and quantify the impacts. Four scenarios are constructed representing different patterns of conversion from cropland to forest under various conditions set by the CCFP. Scenario A represented the baseline, i.e., the cropland and forest area conditions before the implementation of CCFP. Scenario B represents the condition under which all hillside cropland with slope larger than 25 degrees was converted into forest. In scenario C and D, hillside cropland with slope larger than 15 degrees and 7.5 degrees was substituted by forest, respectively. Under the various scenarios, the NPS pollution reduction due to CCFP implementation from 1996-2005 is estimated by SWAT. The results are presented as percentage change of water flow, sediment, organic N, and organic P at watershed level. Furthermore, a regression analysis is conducted between forest area ratio and ten years' average NPS load estimations, which confirmed the benefits of implementing CCFP in reducing nonpoint source pollution by increasing forest area in mountainous areas. The reduction of organic N and organic P is significant (decrease 42.1% and 62.7%, respectively) at watershed level. In addition, this study also proves that SWAT modeling approach can be used to estimate NPS pollutants' impacts of land use conversions in large watershed.