•Dazhai Terrace landscapes in Southwest China were maintained well.•The high income from agricultural multi-functional development drives local villagers to maintain continually terraces.•Reasonable benefit distribution mechanisms promote multi-stakeholders to jointly develop multi-function of Dazhai Terraces. Agricultural landscapes in mountainous areas are facing the destruction due to farmland abandonment. A sustainable conservation mechanism is needed urgently for the rural areas in these places. Dazhai terraces of Longji Terraces, Southwest China are maintained well based on agricultural multi-functions developed by multi-stakeholders. From the perspective of household economics, this study examined the income structure of households in Dazhai and estimated every household’s income based on the collected data via semi-structural interviews and the statistical data. In Dazhai, the income of households is mainly comprised of agricultural income, compensation for maintaining terraces (CMT), tourism income dividend (TID) and income of local non-farm jobs (IINJ). The IINJ and the TID constitute the most and the second more part of the household incomes, respectively, which account for 70.8% and 17.8% of the total household incomes. The agricultural income just plays a slight role in improving the household incomes. 97.7% of households in Dazhai earn a higher income a year from the agricultural multi-functions than those migrant workers in the region. The sustainable high income from terraced multi-functions is the main driving force to maintain Dazhai terraces. The multi-functions of Dazhai terraces are developed jointly by local governments, companies and villagers. More importantly, these stakeholders’ cooperation rests on the reasonable benefit distribution principles between companies and Dazhai and among villagers in Dazhai. In sum, the benefit distribution mechanisms drive multiple stakeholders to maintain terraced landscapes directly or indirectly.