The main objective of this research is to study the optimized combination of land allocation to different land uses like rangeland, orchard, irrigated farming and dry farming for minimized soil erosion and maximized people`s net income in Kharestan watershed located in the Northwest of Eghlid, Fars province, Iran. A multi-objective Linear Programming (LP) model was applied in three different land use scenarios including existing land uses plus land management (Scenario 1), existing land uses with some degree of land management (Scenario 2), and proper land uses plus land management (Scenario 3). The amount of soil loss and net benefit in each land use were computed and used as inputs to formulate the objective functions and governing constraints in optimization problem. The problem was solved using the simplex method with the help of LINGO software package and the optimal solution was ultimately determined. The results showed that in the optimized condition, while rangelands experience no change, the area of orchards should be increased from 561 to 2115 ha (377%), irrigated farms should be reduced from 871 to 237 ha (73%) and dry farming lands should be decreased from 1050 to 129 ha (88%). Also, by existing land management, land use optimization decreases soil erosion by 3.7% and increases net income by 163%. In existing land use some land management implementation, decreases soil erosion by 37% and increases net income by 206%, while in proper land uses and management, soil erosion decreases by 53% and net income increases by 208%. Sensitivity analysis showed that the area of orchards and rangelands are the most sensitive parameters and their changes have the highest effect on the amount of net income and soil erosion.