Revolved around two points (water source protection and local community development), both theoretical and practical aspects related to environmental management were discussed. The concepts concerning environmental management for water source protection in plain river network were defined and discussed. Complex System, Environmental Justice, Circle′s Protection, and Integrated Water Resources Management were applied to environmental management for water source protection in plain river network as main theories. The vulnerability of water source system and social-economic system, the equality of three areas (water source area, serving area and upper stream area), the circles of protection area and land use, and the integration of four dimensions (time, space, multidiscipline and stakeholder) were defined as the kernel of those theories. Water environment in Upper Huangpu River Watershed in Shanghai, as a study case, is influenced by regional social-economic factors, such as regional development and water quality of upper reaches, urbanization and population scale, local economic level and point pollution, land use and non-point pollution. The case study results show that the environmental management system composed of stakeholder involvement model, cooperative approach, and circle′s protection method is a new way to water source area protection in Upper Huangpu River Watershed.