Abstract: As the important geographical spatial unit in mountainous areas, the small watershed space gathers a large number of rural populations, industries and supporting facilities. The dual dilemma of ecological vulnerability of small watersheds in the context of diversified natural resource patterns and low return on investment and construction has forced the conservation and development and use of land resources in small watersheds to follow the path of high-quality development. At present, rural small watershed spatial governance research is being orientated to a more efficient mode, and some studies have conducted systematic research on the theoretical and practical basis of small watershed spatial governance, but the research on the spatial development of rural industries in mountainous sub-watersheds in a detailed way is relatively lacking. This paper analyses the growth characteristics of 'self-organization' industrial space in rural space in small watersheds by borrowing the GIS database platform and applying field surveys and spatial measurement models to explore the development predicament faced by rural industrial space in small watersheds. Based on this, a logic and optimization framework for rural industrial space embedded in small mountainous watersheds is constructed. Planning methods and techniques are proposed to promote the orderly development of 'mountainous small watershed industrial space unit'. Furthermore, exemplary rural industrial space governance strategies for small watersheds are refined to provide scientific guidance for small watershed spatial planning and facilitate poverty alleviation and shared prosperity in mountainous villages.