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Despite the importance of watershed health elasticity (WHE), it has yet to be systematically explored. The present study aims to conceptualize and model WHE, and to apply this framework in the Shazand Watershed, Iran. Diverse land-uses and increasing industrial and mining pressures characterize the area, which has a substantial research background. Toward that, the WHE approach was first defined based on prevailing environmental and anthropogenic challenges. Subsequently, the current, minimum, and ideal health conditions of the Shazand Watershed were assessed using the Pressure-State-Response (PSR) framework. For this purpose, the watershed's pre-industrial state and its land suitability for agricultural use were considered benchmarks for ideal health conditions. Furthermore, the ideal and minimum thresholds for criteria related to air pollution, vegetation cover, and climatic variables were estimated using time-series analysis. At the same time, human-related factors were evaluated based on the Sustainable Development Goals (SDGs) adapted to local conditions. Finally, WHE was quantified by integrating indices of minimum and ideal watershed health (WH) conditions. The results revealed that the current health of the Shazand Watershed is, on average, 24% distant from the minimum threshold and 28% from the ideal state, with an overall WHE of approximately 48%. On the other hand, the findings indicated that the watershed reaches its minimum acceptable health condition when the health index approaches approximately 0.37. Under ideal conditions, the watershed's health index would be around 0.65, corresponding to a relatively moderate level with a negative trend. The overall WHE index of the Shazand Watershed was assessed as moderate. The WHE index offers a more robust, forward-looking framework for identifying high-priority areas and enhances strategic planning for effective watershed management. • The Watershed Health Elasticity (WHE) framework was initiatively introduced. • WHE prioritizes management via identifying critical zones over static health. • WHE integrates Pressure-State-Response framework with two extreme thresholds. • WHE was applied to the Shazand Watershed, Iran, with 24% critical state conditions. • WHE index revealed sub-watersheds with high decline risk despite moderate health.