Cultural landscape protection compensation is a new topic in modern human geography. In this paper, we firstly proposed the theoretical framework of cultural landscape protection compensation of traditional villages, and then set up the cultural landscape protection compensation model on the basis of proposed theoretical framework. Finally, we discriminated the driving factors and offered a proof to the model, which takes Xiangxi nationality autonomous prefecture in Hunan province as a case study. The results can be concluded as follows: (1) From the aspects of the traditional architectural style, the location and pattern of villages, dynamical inheritance of the intangible cultural heritage of villages, and the level of their social and economic development of villages, traditional villages in Xiangxi conforming to the implementation conditions of cultural landscape protection compensation. (2) From the aspects of landscape characteristics and values, external market recognition, self-loss, government management, etc., cultural landscape protection compensation of traditional villages in Xiangxi conforms to the proposed cultural landscape protection compensation model. (3) From the aspects of its driving factors, cultural landscape protection compensation features of the 82 traditional villages in Xiangxi are in accordance with the comprehensive driving mode of landscape characteristics, government management, external market and self-loss. (4) In the traditional villages of Xiangxi, the cultural landscape protection compensation can be divided into three types, namely, social and economic compensation, historical and cultural compensation, and natural environment compensation. The factors of each type, such as social economy, historical culture, natural environment, all influence the structure of the compensation model.