This paper introduced the use method of the toolbox based on ArcGIS 9.3 environment for analyzing hydrological information and structures, including the procedures of extracting river network from raw digital elevation model (DEM) data and problems to be considered. Shahe river watershed locates in Ji County of Tianjin city. It was chosen as watershed characteristics from DEM with 90 m resolution and river catchment properties were collected. Arc Hydro model was used to generate 28 sub-watersheds. Compared with actual hydrological characteristics, the results are rational.