Tianbao reservoir in southern China (surrounded by Eucalyptus plantation) serves as a source of drinking water for the inhabitants. However, the reservoir water experiences black water (BW) of which the cause remains unclear. In this study, field observation and simulated laboratory experiment were conducted to understand the cause of the BW. The diffusive gradient in thin-film (DGT) device monitored the spatial changes in concentration of iron (Fe), manganese (Mn), sulfide (S), and dissolved organic carbon (DOC) at the SWI. The planar optode (PO) showed that hypoxia contributed immensely to the high positive fluxes Fe, Mn, and S measured, which co-precipitated to form black materials (FeS and MnS) at the SWI. The co-precipitation between Fe-S and Mn-S was supported by their significant positive correlation (Fe-S: r > 0.05, p < 0.05, Mn-S: r > 0.2, p < 0.05). Significant reduction (p < 0.05) in tannins concentration from November (strong thermal stratification) to December (weak thermal stratification) indicated that Fe and tannins reacted during the mixing of reservoir water in December due to weak stratification. The simulated experiment confirmed that fresh Eucalyptus leaves produces a significant (p < 0.05) amount of tannins during hypoxia and reacts with Fe to produce black water. A high positive correlation (r > 0.8) between Fe and DOC demonstrated that Fe and DOC combined and contributed to the reservoir water blackening. The study provides a better understanding on the impact of Eucalyptus plantation on water quality and provide guidance for scientific planting of Eucalyptus plantation in reservoir basins in southern China to ensure safe drinking water.