Hydropower is a natural renewable energy with outstanding technological superiority in short-term operation. Short-term hydro generation operation (SHGO) requires not only lord dispatch in single station, but also the coordination of hydraulic and electric connection for different stations. In this paper, a coordinated peak shaving operation method of cascade hydropower stations is proposed. Firstly, regular pattern of peak load regulation is analyzed using the load characteristics of power grid. The daily power output of cascade hydropower stations should meet the needs of typical load pattern. In order to satisfy comprehensive utilizations of water resources, the outflow of each reservoir should be no less than the demand of water supply or irrigation. To verify the feasibility and effectiveness of the proposed method, an application of Pankou and Xiaoxuan cascade hydropower stations, located in Hanjiang River in China, is presented in this paper. Simulation results indicate that the proposed method can obtain the maximum peak shaving amplitudes and suggested peak shaving amplitudes at the same time, which satisfies different operation demands of cascade hydropower stations.