An improved Costanza model was developed to assess the health of the Jinhe River Watershed ecosystem. The watershed is located at the center of the Huangtu Plateau in China and has suffered a severe disturbance in the last few decades. Three indicators including vigor, organization, and resilience were calculated respectively by merging ground-based observations with remotely sensed data on a watershed scale. Health indices of 12 topographic sub-watersheds were calculated using a modified Costanza formula. Health evaluated results indicated that sub-watersheds in the Huangtu mountain region were relatively healthy ecosystems with scores over 0.673. The sub-watersheds in the loess mountain and the loess gully regions, e.g., Jinghe, Heihe, and Honghe regions, scored moderately; their evaluated value ranged from 0.505 to 0.606. The two sub-watersheds in the loess gully region and all sub-watersheds in the loess hilly region scored the lowest, less than 0.50 and were considered unhealthy ecosystems. It can be argued that the loess hilly region and the loess gully regions should be in primary consideration for ecological protection and rehabilitation. This study provided a possible quantitative model for ecological planning and landscape management with respect to topographic conditions in this area.