In order to make distributed simulation for the impact of surface water storage factor on the ability of actual water supply in the upper reaches of Xinan river,the paper took the precipitation, potential evaportranspiration, characteristic parameter of underlying surface and combined water consumption to simulate the actual amount of water and its economic value in the upper reaches of Xinan river watershed in 2010.The results showed that actual water supply to downstream is 71.1×108 m3 and the total economic value of water resource is 29.9×108 Yuan. The ability of water supply in Lushui and Jieyuan River watershed is stronger. The ability of water supply in these subwatersheds is much stronger such as Shuaishui and. Dew to the process of artificial water consumption in the watershed of central river valley, the higher value area of water yield has become the lower value one of water yield. The simulation accuracy of water yield in the upper reaches of Xinan river is 97.0%. The stability and applicability of the model is better, but the parameters of underlying surface need further optimum combining accurate situation.