Within the ecosystem services framework, this study explores local population preferences for different land-use management options in the Nacimiento watershed (south-eastern Spain). To this end, we analysed the benefits generated by the watershed through a choice experiment. We selected two ecological (river quality and protected area), three socio-economic (traditional agriculture, ecotourism facilities and wind farms) and one monetary (tax reallocation) attributes associated with various ecosystem services in the area, where changes in land-use are occurring. The data were first analysed using a multinomial logit model. Then, a mixed logit model was used to account for heterogeneity across respondent preferences. Our results indicated that the respondents would support a new management plan, focussing on traditional farming and river quality. Fostering traditional agriculture and ecotourism were also supported by those who consider the preservation of local identity to be important; however, greater priority should be given to integrating the protected area with the preservation of local identity and the priorities of the local population. Furthermore, future stated preference studies to explore the trade-offs among rural-area-management policies should consider using tax reallocation as payment vehicle. These findings may offer important guidelines for the design of future land-use management plans in semi-arid mountains.