In view of the complex hydrogeological conditions in high altitude area, the Large High Altitude Air Shower Observatory (LHAASO) site in Daocheng Haizishan was studied by means of stream outflow measurement, high-density electrical geophysical prospecting, drilling and other technical approaches. The variation of stream flow and groundwater level of different zones and their relationship with the overburden thickness and buried depth of the moderately weathered bedrock surface were obtained. The results show that the groundwater level, generally 5 m under the surface, has a good linear relationship with the ground elevation, and the groundwater level is often low in places with small buried depth of the bedrock surface, which indicates that the fluctuation of bedrock surface has a great impact on the groundwater level. The surface water is classified as grade I (water type:HCO3-Na+K-Ca) with low mineralization and hardness, indicating that the granite lithology has a great impact on the water quality. Based on the above, the water interception and drainage scheme which can protect the safety of LHAASO site and take advantage of high quality water resources was put forward. The scheme was then adopted in the project and produced good results.