Owing to multiple purposes and public interestsin protecting watershed areas, no individual would be willing to sacrifice himself/herself for public benefit. Different stakeholders in watershed protection areas have different preferences. How to establish mechanisms for integrating personal preferences to social preferences is the main issue of incorporating multiple values in a democratic procedure for protecting watershed areas. The current paper depicts the difficulties in governing Taipei Water Source Domain. Based on the results of questionnaires, the paper makes recommendations as to how watershed protection areas should be governed. The results show that high transaction costs, prisoner’s dilemma, externality, governance legitimization are common issues in the delineation of the Taipei Water Source Domain. Different stakeholders have agreed to use social choice mechanisms for delineating watershed protection areas, but have opposed to entrust legislators to vote on their behalf.