© 2015 Yu et al. The "Grain for Green Project" is a country-wide ecological program to converse marginal cropland to forest, which has been implemented in China since 2002. To quantify influence of this significant vegetation change, Guansihe Hydrological (GSH) Model, a validated physically-based distributed hydrological model, was applied to simulate runoff responses to land use change in the Guansihe watershed that is located in the upper reaches of the Yangtze River basin in Southwestern China with an area of only 21.1 km2. Runoff responses to two single rainfall events, 90 mm and 206 mm respectively, were simulated for 16 scenarios of cropland to forest conversion. The model simulations indicated that the total runoff generated after conversion to forest was strongly dependent on whether the land was initially used for dry croplands without standing water in fields or constructed (or walled) paddy fields. The simulated total runoff generated from the two rainfall events displayed limited variation for the conversion of dry croplands to forest, while it strongly decreased after paddy fields were converted to forest. The effect of paddy terraces on runoff generation was dependent on the rainfall characteristics and antecedent moisture (or saturation) conditions in the fields. The reduction in simulated runoff generated from intense rainfall events suggested that afforestation and terracing might be effective in managing runoff and had the potential to mitigate flooding in southwestern China.