In order to study the water resources supply and demand of Zhangye Basin in the middle reach of Heihe River Basin, a system dynamics model has been established based on the macroeconomic model and system dynamics method. A total of five scenarios were designed to simulate the water supply and demand balance for the period 2013-2050. The results showed: the combination of macroeconomic model and system dynamics can better describe the system behavior and reasonably and accurately predict the water demand; the water demand of Zhangye Basin will increase year by year during the prediction period, the annual average total water demands are 21.87×108-30.14×108 m3, the annual average water deficits for the dry years are 4.03×108-7.64×108 m3, the dry year percentages are 31.6%-92.1%, while the average water deficit indexes are 0.1413-0.2217 in dry years; the scenario S5 which took into account social economic development, urbanization effects and water savings is the most optimal scenario that obeys the connotation and principle of sustainable development; not only the government's policy guidance, but also the participation of the public is required to ensure the sustainable development of water resources. Only coordinate the government and the public can guarantee the sustainable development of water resources and social economy.