Abstract:On the basis of clarifying the non-linear effect mechanism of ecological compensation on technological innovation in the compensated area, using the experience of 7 districts and counties of China’s first pilot project of ecological compensation for water resources protection in the cross province Basin -Anhui Xin"an River Basin from 2010 to 2018 Evidence, this paper studies the impact of ecological compensation in the region on technological innovation using the panel threshold model. The results show that ecological compensation has a significant single threshold effect on the regional technological innovation, showing a non-linear "U"-shaped characteristic, that is, when the total amount of ecological compensation investment is less than a certain amount, which is the threshold value, the investment of ecological compensation funds has a restraining effect on technological innovation, and once it crosses the threshold, it will show a significant promotion effect on technological innovation. Therefore, the government should attach importance to ecological compensation investment to promote technological innovation in the compensated areas, to advance the staged characteristics of economic transformation and development, and to pay attention to the continuity of the implementation of ecological compensation policies.