Tiered water pricing is an effective water conservation measure in curbing irrational water consumption among urban residents. An analysis of the current tiered water pricing situation in Xi’an was conducted in order to take full advantage of the leverage effect of the pricing method. This study utilized a supply and demand pricing model to calculate the correlation and elasticity coefficients between water price, per capita water consumption, and per capita disposable income from 2000 to 2020. Four optimized tiered water price schemes were designed from the perspectives of water consumption standards, residents’ acceptance, increment of tiered price differentials, and water expenditure coefficient. The water-saving effects of these four schemes were analyzed and the water expenditure coefficient were projected for the coming years. The results show that Xi’an’s water expenditure coefficient is relatively low and the tiered water price should be increased appropriately. There is a significant correlation between water price, per capita water consumption and per capita disposable income, with the elasticity coefficients of water price and per capita disposable income reaching -0.476 and 0.329, respectively. The increment of the first tier of water pricing in all four schemes could effectively promote water conservation, which ranges from 0.71 to 1.30 CNY/m3. Scheme four exhibits the highest increase in tiered water price and the best water-saving effect. Schemes one and three moderately increase water prices based on urban residents’ water consumption standards, both of which yield moderate water-saving effects. Scheme two only involves a small adjustment in water price and consumption, resulting in unfavorable water-saving effect. Maintaining the same tariff for a long period of time will lead to a gradual reduction in the water expenditure coefficient. The findings of this study can provide some reference for the reform of tiered water price for urban residents.