According to the research achievements of forest hydrology and the valuation of forest ecological benefits in Japan with an abundance of forest, the important effects and machanism of forest functions on preventing flood and decreasing calamities, conserving water and soil were dealt with. The key construction projects of managing mountains and water with forest which were planed and practiced in Japan for several years were introduced briefly. Drawing on the successful experience of other countries, the necessity of the construction of protecting forest on river system was put forward.