Land use and land cover (LULC) changes alter the structure and functioning of natural ecosystems, impacting the potential and flow of ecosystem services. Ecological restoration projects aiming to enhance native vegetation have proven effective in mitigating the impacts of LULC changes on ecosystem services. A key element in implementing these projects has been identifying priority areas for restoration, considering that resources allocated to such projects are often limited. This study proposes a novel methodological framework to identify priority areas for restoration and guide LULC planning to increase the provision of water ecosystem services (WESs) in a watershed in southeastern Brazil. To do so, we combined biophysical models and multicriteria analysis to identify priority areas for ecological restoration, propose environmental zoning for the study area, and quantify the effects of LULC changes and of a planned LULC scenario (implemented environmental zoning) on WES indicators. Previous LULC changes, from 1985 to 2019, have resulted in a nearly 20% increase in annual surface runoff, a 50% increase in sediment export, a 22% increase in total nitrogen (TN) export, and a 53% increase in total phosphorus (TP) export. Simultaneously, they reduced the provision of WESs (baseflow −27%, TN retention −10%, and TP retention −16%), except for sediment retention, which increased by 35% during the analyzed period. The planned LULC scenario successfully increased the provision of WESs while reducing surface runoff and nutrient and sediment exports. The methodology employed in this study proved to be effective in guiding LULC planning for improving WES. The obtained results provide a scientific foundation for guiding the implementation of WES conservation policies in the studied watershed. This method is perceived to be applicable to other watersheds.