The right bank slope of Dagangshan hydropower station in China has complex geological conditions and is subjected to high in situ stress. Notably, microseismic activities in the right bank slope occurred during reservoir impounding. This paper describes the microseismic monitoring technology, and three-dimensional (3D) finite element analysis is used to explore the microseismic activities and damage mechanisms in the right bank slope during reservoir impounding. Based on data obtained from microseismic monitoring, a progressive microseismic damage model is proposed and implemented for 3D finite element analysis. The safety factor for the right bank slope after reservoir impoundment obtained from the 3D finite element analysis, which included the effects of progressive microseismic damage, was 1.10, indicating that the slope is stable. The microseismic monitoring system is able to capture the slope disturbance during reservoir impounding in real time and is a powerful tool for qualitatively assessing changes in slope stability over time. The proposed progressive microseismic damage model adequately simulates the changes in the slope during the impoundment process and provides a valuable tool for evaluating slope stability.