Ecological compensation is a vital mechanism in balancing regional economy and eco\|environmental protection. How to determine compensation standard and how to distribute compensation fund is a hard point. This paper uses eco\|system servicing value, GIS and remote sensing to analyze the changes in land use types and eco-system servicing values of Yangzhou in 2010, 2015 and 2018, which is applied to determine the upper limit of ecological compensation of water receiving area. ECPS is adopted to distribute the compensation fund. Yangzhou's land use structure has changed a lot during 2010 to 2018, with eco-system servicing value dropping to RMB 46 799 million from 55 359 million, 90.38% from water use eco\|system. Water receiving areas shall pay 2 091 million compensation, but the upper payment limit is 1 359 million, indicating an adjusted value by secondary water servicing at 80.02%, core compensation. Compensation funds are to be distributed to Gaoyou (1 013 million), Baoying (508 million), Hanjiang (281 million), Jiangdu (179 million), Yizheng (93 million) and Guangling (17 million) in an decreasing order. This paper presents suggestions on improving water source ecological compensation mechanism from determining compensation targets, setting up supervision and forming multiple compensation.