Abstract: Reservoir resettlement compensation principle―that the living standards of the reservoir resettlement should achieve and exceed the original levels―is exactly specified in Large and Medium-sized Water Conservancy and Hydropower Project Construction Land Requisition Compensation And Resettlement Regulations, which was enacted by The State Council of China in 1991. Thus, the living standard of reservoir resettlement should be a crucial factor in the determination of reservoir resettlement compensation. This paper applies the theory of living standard proposed by Amartya Sen to a systematic analysis of the components of living standard, and on this basis, examines the scopes of reservoir resettlement compensation according to the compensation principle. The associated path of these components is constructed, and two compensation aspects, i.e. the economic compensation and policy compensation, are discussed in detail. We demonstrate the shortage of the current compensation calculation method that determines the compensation by "filling the loss" and leads to insufficient compensation, and suggest that the scopes and standard of compensation should be determined and calculated from the perspective of reconstructing the reservoir migrants' living.