Abstract: With more efforts being put into water environment treatment and water ecology conservation, there are a growing number of state-owned fisheries being expropriated for water pollution control. However, the compensation and resettlement are facing challenges including unreasonable compensation standards, conflict in compensation distribution, interest dispute superimposed with transformation and reforms, and livelihood recovery and development of affected people. Taking “Impoverishment, Risk and Reconstruction”（IRR）mode adopted in the expropriation of state-owned NH fishery in Hubei1 Province as an example, practical experiences are summarized and analyzed. The results show that in order to address these challenges, the government should specify the legitimate rights and interests of fishers and the attributes of compensation, improve the regulations and policies of expropriated state-owned fisheries, set reasonable compensation standards and distribution methods, guarantee affected persons’ rights and interests by incorporating the transitioning reform policies of state-owned fisheries, and take diversified resettlement measures.