Abstract: Using Xingshan County of Hubei Province as a case study, we discussed a strategy for ecosystem conservation based on functions and spatial pattern. The strategy uses the improvement of ecosystem functions as appreciation indices, and the regulation of the spatial pattern of ecological factors as an approach. Here, the ecosystem function for water retention was considered as an appreciation index, due to this county's locatation in the watershed of the Yangtze River. The county was divided into 90 types of vegetation soil slope complexes. A GIS embodied spatial database was used to explore the relationships between the capacity of water retention by a complex and the types of vegetation, soil and slope. We estimated statistically the capacity of water retention of every complex, and evaluated integrally the situation of water retention in the county. The variation location effect describes the phenomenon that the identical variation of a factor may produce different effects on the overall situation, when this variation occurs in different spatial locations. This effect highlights the effect of the spatial patterns of biological and physical factors as well as their combinations to produce ecosystem functions. According to this effect, we can discuss spatially the quantitative variations of ecological factors and the effects of these variations on the overall ecosystem. By this means “quantity” and “space” are integrated. In this study, according to this effect, we changed the situation of water retention in the watershed by regulating the combination of vegetation, soil and slope. The strategy of “spatial pattern based forestland extension” is based solely upon the variation location effect. This study shows that greater benefit of water retention in the watershed can be obtained from the extension of forestland by using this strategy. Likewise, applying this strategy in the establishment of a protective forest system in the Yangtze River basin, the situation of water retention in this basin can also be greatly improved, and people can derive more benefit from water and soil conservation. The variation location effect is of universal significance and useful for ecosystem restoration, conservation and management. The terrestrial ecosystems in many regions are undergoing great changes, and, as consequences, ecosystem functions will be weakened. The conservation and restoration of these ecosystems will be critical problems people must face. Our research work may be an essential step to the restoration of the ecosystem functionality in these regions.