The fact that soil loss causing to increase muddy water and devastate an ecosystem has been appearing upon a hot social and environmental issues which should be solved. Soil losses are occurring in most agricultural areas with rainfall-induced runoff. It makes hydraulic structure unstable, causing environmental and economical problems because muddy water destroys ecosystem and causes intake water deterioration. One of three severe muddy water source areas in Soyanggang-dam watershed is Jawoon-ri region, located in Hongcheon county. In this area, many cash-crops are planted at illegally cultivated agricultural fields, which were virgin forest areas. The purpose of this study is to estimate soil loss with current land uses(including illegal cash-crop cultivation) and soil loss reduction with land use conversion from illegal cultivation back to forest. In this study, the Sediment Assessment Tool for Effective Erosion Control(SATEEC) ArcView GIS was utilized to assess soil erosion. If the illegally cultivated agricultural areas are converted back to forest, it would be expected to 17.42% reduction in soil loss. At the Jawoon-ri region, illegally cultivated agricultural areas located at over 30% and 15% slopes take 47.48 ha(30.83%) and 103.64 ha(67.29%) of illegally cultivated agricultural fields respectively. If all illegally cultivated agricultural fields are converted back to forest, it would be expected that 17.41% of soil erosion and sediment reduction, 10.86% reduction with forest conversion from 30% sloping illegally agricultural fields, and 16.15% reduction with forest conversion from 15% sloping illegally agricultural fields. Therefore, illegally cultivated agricultural fields located at these sloping areas need to be first converted back to forest to maximize reductions in soil loss reduction and muddy water outflow from the Jawoon-ri regions.