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Serbia’s hilly-mountainous regions are extremely vulnerable to flooding as a consequence of their natural characteristics and human impacts. Land mismanagement influences the development of erosion processes, and causes soil degradation that significantly reduces the land’s capacity to infiltrate and retain rainwater. Inappropriate land use as well as development activities replace permeable with impervious surfaces in the watershed. This leads to more rapid runoff generation and the more frequent appearance of torrential floods and bed-load deposits on downstream sections. Environmental degradation creates economicsocial problems within local societies which is often followed by depopulation. Restoring watersheds to their optimal hydrologic state would reduce flood discharge and by increasing groundwater recharge would increase both low-flow and average discharges in springs and streams. Best management practices could be developed through the application of specific combinations of biotechnical, technical and administrative measures, and by using the concept of natural reservoirs. The design of such practices is explored through a case study of the watershed of the river Jelašnica, southeastern Serbia. Realization of these planned restoration works should help decrease the annual yields of erosive material by 44.1% and the specific annual transport of sediment through hydrographic network by 43.6%. Representative value of the coefficient of erosion will be reduced from Z=0.555 to Z=0.379. The value of maximal discharge Qmax-AMCIII(1%)=54.17 cubic meter/s, before restoration, is decreased to Qmax-AMCIII(1%)=41.22 cubic meter/s after restoration, indicating the improvement of hydrological conditions, as a direct consequence of land use changes. Administrative measures are applied through Plans for Announcement of Erosive Regions and Protection from Torrential Floods in the Territory of Leskovac Municipality.