This study investigated factors that influence the Willingness to Pay (WTP) for watershed services and conservation in Tanzania with the case study of the Lower Moshi Irrigation Scheme in Pangani Basin, Tanzania. A total of 99 farmers were selected randomly from the Mabogini ward for interviews using a Contingent Valuation Method. There were also focus group and key informants’ interviews. Structured and semi-structured questionnaires were used to gather information. Data were analysed using multi-linear regression model. Results showed that 80% of the respondents showed a WTP for additional cost of watershed services. Findings further showed that parameters of education, farm size and household income were found to be statistically significant at p=0.05. However, there was inverse relationship between WTP and farm distance, probably due to the perceived risk of decreasing water availability as distance to the water intake increases. The results also showed R2 = 0.845 suggesting that as high as 84.5% of the variation in the dependent variable (WTP) had been explained by the variables included in the model. For effective WTP, the observed weaknesses should be addressed. These include environmental education, participatory basin management approach and good governance of basin resources