The upper reaches of the Yellow River is very rich in hydropower resources, is one of the hydropower bases that is developing emphasized by our country, the development of hydropower resources has a very significant meaning to optimizing China’s energy structure and solving the energy shortage problems. At the same time, the large hydropower cascade development may lead to a series of ecological and environmental problems; this has become a major challenge for the river basin (of related region) to achieve sustainable development. Therefore, through the establishment of a scientific and reasonable assessment model, systematic assess the impact strength and mechanism of action of the hydropower cascade development on the ecological environment, can not only improve the decision-making level of management, but also has important theoretical and realistic significance to achieve the sustainable development of the river basin or related region. Considering the characteristics of the Yellow River’s upper reaches’ hydropower development, this paper put forward the conception of environmental carrying capacity which is based on the Ecosystem Health, constructed an environmental carrying capacity measurement model. Combine international standards and China’s current situation, according to the relevant national ecological county (or city) regulations, use trend analysis to establish an ecosystem health grade standard for river basin. Based on the environmental carrying capacity measurement model and the ecosystem health grade standard, this paper constructed an environmental carrying capacity evaluation index system, use analytic hierarchy process to determine the weights of this index system, then determine the environmental carrying capacity standard according to the ecosystem health grade standard, use this standard to analyze the impact hydropower has to the eco-environment of the river basin.