Socio-economic analysis of natural resources projects provides the environment of economic development for each country. Also socio-economic impact assessment is an introduction for continuous dialogue between the executive and the supervisory organizations and utilizers community and enhances the traditional knowledge on natural resources culture and recognition of the needs of poor people, low income and vulnerable groups. Considerable amounts of money is paid for the implementation of watershed management projects in our country. On the other hand there are different views between the managers, experts and residents of watershed areas on the results and efficiency of watershed management activities that makes it necessary to assess the economic and social activities. Socio-economic effects of watershed management projects from the perspective of the inhabitants and also financial flows of these projects were assessed in this study. This assessment was conducted using five questionnaires, includiong: 1- economic impact assessment, 2- social impact assessment, 3- dissatisfaction cases, 4- problems and challenges, 5- solutions.The content validity of questionnaires was confirmed based on technical reviews and experts' experiences. Also reliability of the questionnaires was controlled using Cronbach-alpha which showed reliable condition of the questionnaires. Results show that increase in livestock number (with weighted average of 3.487) was the most important economic effect, modifying the cultivation pattern in favor of forage plants (with weighted average of 3.012) was the most important social effect, lack of government cooperation for reducing surplus livestock number (with weighted average of 3.512) was the most important dissatisfaction factor, increase in livestock number (with weighted average of 3.612) was the most important problem and challenge; and finally providing sufficient fuel and create new job activities (with weighted average of 3.812) was recognized as the most appropriate solution for improving the effects of these projects. Financial assessment of watershed management projects was performed by calculating B/C and NPV criteria which showed bunch-seeding projects with B/C equal to 1.57 to be the most convincing project and water resources construction was recognized as the least convincing project with a B/C equal to 1.01. Key words: Western Azarbayjan, Social effects, Financial flows, Watershed management project, Piranshahr, Shahristen.