Hehuang Region of Qinghai, a pivotal upstream region for the Yellow River Basin’s ecological protection and high-quality development, faces dual challenges: safeguarding plateau ecology and fostering rural development. Small watersheds, fundamental units for water collection, ecological governance, and human settlement, exhibit severe spatial fragmentation in their rural settlements, villages, and farmland. This fragmentation, intensified by human intervention, threatens the ecological security of the upper Yellow River. Through comprehensive analysis, this study reveals common ecological laws, essential characteristics, and spatial patterns of these small watershed ecosystems, proposing principles for spatial pattern control and management. These insights offer a foundation for crafting management and progressive development strategies for rural human settlements in similar small watersheds.