Watershed carbon compensation can not only reduce carbon emissions but also promote regional coordinated development. Although existing studies have shown that carbon compensation can act as a mechanism to balance regional development and conservation goals, there is relatively little knowledge about carbon compensation taking land use change into consideration. This study, building on the theoretical framework of watershed carbon compensation, calculates the carbon emissions based on land use change in the Yangtze River Economic Belt, analyses its spatial differentiation and constructs a carbon compensation model. The results show that from 1990 to 2018, carbon emissions from land use have almost quadrupled, from 1.74 x 108 tons to 6.76 x 108 tons. Cities with high carbon emissions from land use are concentrated in economically developed downstream areas or midupstream urban agglomerations. As for carbon compensation, the total amount of it in Yangtze River Economic Belt has gradually increased over the past 29 years. Spatially in 2018, the upstream area received 1.31 x 108 tons of carbon compensation, the midstream area received 5.40 x 107 tons and the downstream area provided 2.83 x 108 tons. Furthermore, this study discusses reduction measures of carbon emission in watershed based on the optimisation of land use patterns, and horizontal and vertical watershed carbon compensation. It suggests the conditions and paths of watershed carbon compensation based on land use change from the four perspectives of socio-economic foundation, institutional environment, governance structure and resource allocation.