Abstract: In order to understand the impacts of land expropriation on rural reservoir resettlement's welfare, using structural equation model, empirical analysis was made on resettlement at Danjiangkou Reservoir of South-to-North Water Diversion Project. The results show that changes in land area before and after relocation, quality of land, and especially the compensation policy have significant influence on reservoir resettlement's welfare, of which the former has negative effects whereas the latter two changes show the opposite. Reservoir resettlement's welfare is tightly related to development opportunities, economic conditions, social adaptation, living conditions, and social security; therefore, to improve the resettlement's welfare and create greater sense of gain, compensation standards need to be raised reasonably and plans regarding improving development opportunities and economic conditions for relocatee should be implemented.