In China, most of the small hydropower (short for SHP) plants are currently seeking for benefits in power generation and economic revenue with little consideration of environmental flows for ecosystems, causing great impacts on river ecosystem services in the downstream of the dams. Negative ecological impacts of small hydropower have drawn increasing attention from the public. This paper used emergy analysis, one of the ecological energetic accounting methods, to evaluate the overall ecological impacts of construction and operation of small hydropower and took Guanyinyan hydropower plant in Chishui City, northwest of Guizhou Province as an example. Having capabilities in accounting multiple forms of energy and materials both from environmental and economic points of view on a common energy basis, the method of emergy analysis was widely used for supporting the evaluation of agricultural, wetlands and urban systems and was proved to be a useful tool for evaluating the overall performance of a mixed ecological and economic systems. The related indices and ratios based on emergy flows such as emergy yield ratio (EYR), environmental loading ratio (ELR) and emergy sustainability index (ESI) can be used for characterizing resource consumptions, environmental impacts and overall system sustainability. Through incorporating losses of the downstream ecosystem services into the operation cost of the power production system, the results showed that the studied system was supported by a total emergy of 6.18×10¹⁸sej in 2010 to produce 2.26×10¹³J of electricity, of which the downstream ecosystem service losses was the largest among multiple marginal costs, accounting for 44.84% of total ecological economic cost. The losses of ecosystem service mainly included those due to biodiversity losses (especially rare species losses) and climate regulation losses, with 2.77×10¹⁸ and 4.63×10¹³ sej/a respectively. Without considering the ecosystem service losses, the ELR of the studied system was 1.92 and the ESI was 1.22. However, when considering ecosystem service losses, the ELR of the studied system increased to 4.26, which was much larger than those of large hydropower generation projects in Mekong River or those in Korea, showing an increased pressure on local environment. And the value of ESI decreased to 0.34, which was much lower than 1, indicating that the studied power production system was not sustainable. Furthermore, the results suggested that the degradation of river ecosystem in the downstream of the dam during operation period greatly reduced the sustainability of the system. Thus, for a small hydropower, occupying environmental flows of the downstream and the development pattern at the expense of the ecosystem approach would be unsustainable. Sufficient environmental flows would be essential to the river ecosystem in the downstream, especially for maintaining the aquatic biodiversity. Environmental-friendly and social harmonious development of water resources would be necessary to achieve sustainable development for small hydropower. Relevant authorities should strengthen the planning and management of water resources development to ensure the sustainability of small hydropower and the health of river ecosystem. In addition, this paper reflected that emergy analysis, as a measure of the environmental support and the work to keep ecosystem sustainability, is an effective tool that is capable of providing an integrative assessment, and then provide a basic for the sustainable development of small hydropower.