This paper seeks to clarify recent changes of economic base in mountain village, where water power sources were developed during the high economic growth period of the two decades since the mid-1950s and in a short term, a remarkable increase and decrease in population due to the dam construction was found. Special attention is devoted to elucidate how the village, which was affected greatly by the dam construction in economic and financial terms, has reorganized the base, by examining micro characteristics of employment and wage by each household and worker. The study area is Kanayama-cho. Gifu Prefecture in Central Japan. Its key features are discussed in the second section. In the third section, the changing base of Kanayama's economy in terms of its industry and finance is examined as a whole, by comparing the two periods before and after 1976, when the three dams in the municipality were completed. During the first period, when they were under construction, establishments and employed person had an increase in number. Moreover, the municipality positively invited factories to the sites which were repaired in relation to the dam construction. Immediately after the completion of the construction work, the financial ability index remarkably rose owing to the upturn of the fixed property tax to the local tax. Nevertheless, there was a slump in construction industry and no remarkable growth of employment opportunity was found. As the property associated with the dams was redeemed, an increase of the revenue was not expected. As a result, the financial ability index gradually decreased, although the designation of kaso-chiiki (or serious depopulation area) was canceled in 1980. These imply the municipality's unstable economic base, which could change in relatively short term. The fourth section elucidates micro-level features of the economic bases, specifically employment and wage structure by each household and worker, based on the questionnaire survey in 1990 for the sample factories and households. Although the rate of intra-municipality employment is quite high (more than ninety percent), a minute inquiry shows that male workers between the twentieth and fortieth tend to work outside the municipality than those of the fiftieth and more. Besides, because of continuous outflow of young labor force, there are rather rich employment opportunites for female workers and middle-aged and old male workers at local manufacturing plants. It is also indicated that the wages of "female jobs" for married women of the late twentieth and thirtieth are as high as, or higher than, the ones of men of the same age. These married female workers tend to live together with their mathers-in-law, who can take partial charge of housework and child-rearing. Since the completion of the dam construction. Kanayama succeeded in forming its own local labor market, particularly in the division of manufacturing and assembly. However, whereas the middle-aged and old male workers have played the central part, female workers can be regarded as supplementary and marginal. Additionally, it should be noted that the labor market has lacked young workers.