Kouhe River water pollution caused by industry, agriculture and life sewage, not only reduced the water use function, but also directly affected the quality of Qinghe River. Due to the lack of effective management of water resources, the irrational use and water environment pollution occurred in Kouhe River basin. In this paper, in order to maintain the sustainable development of Kouhe River basin, taking Xifeng County and Kaiyuan City as two control units, COD as pollution factor, the water environmental capacity of Kouhe River basin was calculated. Combined with water quality monitoring data, river environment functional zone, pollution census data and the recovery cost of COD, an ecological compensation standard was determined. When the guarantee rates were 50%, 75%, and the average flow of the driest month in recent 10 years, the corresponding compensation standards of Xifeng County to downstream Kaiyuan City were 390.9 x 10(4), 448.6 x 10(4) and 514 x 10(4) yuan · a(-1), respectively. The river basin ecological compensation mechanism was put forward which should include ecological compensation fund raising, allocation and supervision.