The conflict between water quality management and land development within the watershed preservation districts is the main purport explored in this study and the study takes the watershed preservation district of Nan-Haw reservoir as the case to testify. This study is based on the current law and viewpoint of total pollution effluent mass control. The method of linear programming is adapted to establish the land carrying capacity model and to find out the constrains and effective factors in hillsides development. Statistical technique is applied to analyze land suitability and finally to detennine the sequence for development of the suitable places in order to minimize catastrophes and pollution resulted from the hillsides development. The findings are summarized as follows: 1. When Water assimilative capacity can bear the water pollution resulted from development, we can apply land canying capacity model to find out the best way of disposing land resorce. We can also apply the analysis of the land suitability to get the sequence of the suitable development. 2. The development activities pennission depends on the amount of pollution and development location within the watershed preservation districts. Precisely, if the amount of derivative pollutant should go beyond the limits or the cases should locate in improper sites, and development would be strictly limited or even baIlI1ed. 3. The analyses in this study related to the development activities within the watershed preservation districts from the aspects of total pollution effluent mass control and land suitability can show the appropriate scales, kinds, suitable (or unsuitable) location and the sequence, which provides a worthwhile reference hillsides to development and management.