The paper used grey relation analysis method to evaluate water quality in Taihu lake basin and detailed the gray correlation analysis method used in water environment quality evaluation process of Huzhou Xintang port in Taihu lake basin . The method applied the impact factors of Huzhou Xintang port water cross-section in Taihu lake basin, such as DO, CODMn, NH3-N; these concentration are measured to form the reference sequence, each factor is the sequence of standard concentration, through calculating the correlation degree between the comparison of the sequence and the reference sequence and according to their sizes to determine the comprehensive water quality level. Research showed that the water environmental quality in this area was poorer and pointed out the constructive measures to govern Taihu lake basin .