Abstract: The impact of excessive use of chemical fertilizers on the environment is intensifying steadily nowadays. Based on the survey of farm households in four counties (cities) in the mountainous region of Zhejiang Province, CD production function method was used to analyze economically whether the application of chemical fertilizers in the region exceeds the actual need or not. It was found that the chemical fertilizer application rate prevailing in the four counties exceeded the optimal rate in the economic sense. The farmers over-fertilized food crops and cash crops, particularly food crops. Meanwhile, the econometric model was used to analyze factors stimulating over-consumption of chemical fertilizers. Results show that the proportion of the farmer population participating in non-agricultural employment, quality of the land and irrigation conditions are the major factors stimulating excessive application of chemical fertilizers. Based on the findings, some suggestions are put forth for policy-making.