The environmental impacts of hydropower projects are generally large due to project scale and characteristics. In fact, the impacts can be both positive and negative. At present, the theories and methods of environmental impact assessment are still worldwide problems. This paper analyzes the hydropower development of the middle and lower reaches of Nu River as a case study. Through the selection and quantitative analysis of the environmental impact, an economic cost-benefit analysis has been maken to describe long-term and holistic impact. As a result, the direct environmental benefit of four-step hydropower development in the middle and lower reaches of Nu River are 2.77×108 RMB per year, and the environmental cost is 3.96×10⁸ Yuan RMB per year. The ratio of the direct environmental benefit and the environmental cost of this project is 1∶1.4, and the net benefit value is -1.19×10⁸ Yuan RMB per year. It should be noticed that some impact factors in this study, such as culture diversity, terricolous plants and animals, are not exact measures. That is to say, the results should be used to assist decision-making and not taken wholescale.