This study, which designs a model for integrated watershed management in Iran, is based on qualitative research applying a grounded theory methodology. Interviewing was the main tool for gathering data. Using snowball sampling, we chose three categories of informants: (a) academics and experienced natural resource experts, (b) representatives of active environmental non-governmental organizations, and (c) local people. Integrated watershed management was constituted from contextual conditions (i.e., physical conditions of watersheds, infrastructure, and constructed facilities); causative conditions (i.e., management challenges, climatic–environmental factors, and local people's socio-cultural and economic conditions); and intervention conditions (i.e., extension and education, motivation, attitude, and professional ethics factors). Integrated watershed management paves the way for strategies involving holistic and systems thinking, improved credit and financial resources, coordinative and general policymaking, stakeholder participation, and integrated information systems. These strategies result in environmental, economic, and social outputs.