Identification of ecological restoration space is an important prerequisite for ecological restoration and reconstruction. At the watershed scale, the Source Region of Yangtze River (SRYR) was thoroughly studied by quantitative method combining with qualitative method aiming at establishing an identification framework for ecological restoration space. The ecological restoration priority areas were identified and recommendations for systematic protection and restoration were proposed according to assessment of the dominated ecosystem service, ecological risk, and vegetation degradation, respectively. The results indicated that ① ecosystem services increased from northwest to southeast in the SRYR in 2000 and 2015. The amount of water conservation and soil retention per unit area decreased by 18.06% and 22.9%, respectively; while the amount of wind and sand fixation per unit area increased by 8.84%, and the Net Primary Productivity (NPP) did not change significantly. ② The ecological risks based on ecosystem services were mainly medium to low levels listed in grade 1, 2 and 3,accouning for 74.41%. The area in grade 4 accounted for 19.35% of the whole region. The grade 5 ecological risk was concentrated in Chindu county, Yushu city and Tanggula Mountain, accounting for only 6.24%. The distribution pattern of different risk levels was a decreasing circle. ③ The Normalized Difference Vegetation Index (NDVI) increased by 0.013% annually from 2000 to 2015. The majority of grassland did not degrade. The area of mildly degraded grassland accounted for 0.82%. The area of moderately and severely degraded grassland accounted for 1.09%. ④ In order to control black soil, sandy land and soil erosion, natural restoration and supplemented by artificial restoration was insisted via strict management of rotational grazing and forage-livestock balance. Grazing was strictly prohibited in nine plots (393.75 km²), i.e. Angriqu, the north of Maduo village, Jiaqiaoqu, Dawanglu, Quguomaxia, Duocaiqu, the north of Chindu county, and Zhaqu. The manual intervention and protection measures were pertinently implemented for restoration of sandy land, black soil beach and grassland pest control project. The results provide theoretical basis and technical support for the maintenance and improvement of ecosystem service function and restoration and governance of the degraded ecosystem in Qinghai Tibet Plateau.