The construction of the Three Gorges Dam in China and the subsequent impoundment of the Yangtze River have induced a major land use change in the Three Gorges Reservoir Region, which fosters increased inputs of sediment and nutrients from diffuse sources into the water bodies. Several government programs have been implemented to mitigate high sediment and nutrient loads to the reservoir. However, institutional weaknesses and a focus on economic development have so far widely counteracted the effectiveness of these programs. In this study, the eco-hydrological model soil and water assessment tool is used to assess the effects of changes in fertilizer amounts and the conditions of bench terraces in the Xiangxi catchment in the Three Gorges Reservoir Region on diffuse matter releases. With this, the study aims at identifying efficient management measures, which should have priority. The results show that a reduction of fertilizer amounts cannot reduce phosphorus loads considerably without inhibiting crop productivity. The condition of terraces in the catchment has a strong impact on soil erosion and phosphorus releases from agricultural areas. Hence, if economically feasible, programmes focusing on the construction and maintenance of terraces in the region should be implemented. Additionally, intercropping on corn fields as well as more efficient fertilization schemes for agricultural land were identified as potential instruments to reduce diffuse matter loads further. While the study was carried out in the Three Gorges Region, its findings may also beneficial for the reduction of water pollution in other mountainous areas with strong agricultural use.