Abstract: The Geermu River drainage basin is a typical area undergoing water resource development in northwestern arid regions. To meet the need of sustainable development of water resources in the basin, according to the report “Water Resource Comprehensive Utilization Programming of the Geermu Drainage Basin of Qinghai Province”, we analyze whether the water resource demand for the aim of development will make a devastating difference on the environment of the downstream salt lake. A mathematic simulation model for the Geermu River drainage basin is built to predict the change trend of average hydrological sequences and water resource status in different typical years. Water resource reasonable development and utilization of the Geermu River drainage basin under the condition of having no effect on the environment of downstream salt lake are discussed on the basis of the predicted results.