Transforming slope farmland to terraces has been an effective measure to improve crop yield per unit and control soil and water loss. Based on the theory of internal and external effects of transforming slope farmland to terraces, this paper constructs the mathematical model for quantitatively evaluating ecological-economic coupling status. Taking the Yangou watershed of Yan'an city which is located in the core area of the hilly-gully region of Loess Plateau as a case, using spatial data of land use and DEM, crop yield and soil erosion modeling data, and monitoring and survey data, this paper quantitatively assesses and analyzes ecological-economic coupling effects of transforming slope farmland to terraces. The results show that: (1) it is feasible to evaluate ecological-economic coupling effects of transforming slope farmland to terraces from the internal and external aspects. Soil erosion cost per economic yield unit (Ecological-economic coupling index) can quantitatively and effectively reflects ecological-economic coupling level. (2) Assuming beans and corn are cultivated on the slope farmland, the changing trend of ecological-economic coupling index shows that it ascends as the topographic gradient rises. This indicates that the higher topographic gradient, the more soil erosion cost of per economic yield unit. Topographic gradient 5° and 15° are two important thresholds. There is no need to transform slope farmland below 5°. However, slope farmland between 5° and 15° should be the key object of transformation to terraces. Slope farmland above 15° needs to be converted to forest and grassland. (3) Transforming slope farmland to terraces has dramatically enhanced ecological-economic coupling level of cultivated land in the Yangou watershed. Before and after transforming slope farmland to terraces, the ecological-economic coupling index is 1.805 t/100 yuan, 0.853 t/100 yuan, respectively, decreased by 52.73%. As the transformation from slope farmland to terraces and the enhancement of vegetation coverage rate, the flood runoff and sediment transport modulus have sharply declined, and the soil and water loss situation has been obviously improved.