Soil and water conservation ecological compensation is a effective way to resolve conflict between water and soil losses and socioeconomic development, broaden the investment in soil and water conservation, and promote the development of soil and water conservation. It is necessary to establish soil and water conservation ecological compensation mechanism of Yangtze River basin for accelerating the regulation speed of water and soil losses, solving the problem of shortage of investment in soil and water conservation, and enhancing the protection consciousness of soil and water resources and ecological environment. According to the characteristics of water and soil losses in Yangtze River basin, relationship among group interest, and differences among countermeasures, the conception and suggestions of establishing soil and water conservation ecological compensation mechanism in Yangtze River basin have been put forward in this paper.