Abstract: In order to coordinate the development between water environment carrying capacity and regional economy, the system dynamics method (SD) was used to model the water environment carrying capacity in Baiyangdian Basin which includes 17 refined industrial industries and is constrained by multiple factors of water resources, water pollution and water ecology. Thirty-two sensitive indicators were obtained from sensitivity analysis of SD. Taking local practical development demand into consideration, 6 control scenarios which are applicable to the carrying capacity of water environment in Baiyangdian Basin were set, and the simulation along with the regulation results of water environment carrying capacity from 2017 to 2035 in Baiyangdian Basin were obtained: (1) If the present status is maintained, population and economic growth will arouse increasing demand for water resources and bring more water pollutants. Consequently, there will be a water resource gap which may further increase after 2020 and the water pollution will be worsen after 2021. (2)Compared with the current scenario, industrial structure adjustment or water environment protection could improve the overload of water environment in Baiyangdian Basin by 10.78% or 10.42% and increase the GDP by 0.22% or 0.26% in the future. However, the sustainable development scenario which considers the coordinated development of economy and environment is more favorable. When the GDP increases by 0.22%, the improvement of the water environment overload situation could reach 16.23%, which means the improvement effect is more distinct. If more stringent water environment protection measures are taken, the improvement effect may reach 34.56%, but the GDP will decrease by 5.06%, and the economic development will be greatly restricted. (3)Based on the above analysis, the overall planning must be conducted. High-end, high-tech and service industries should be vigorously developed, the scale of primary and secondary industries should be rationally reduced, and the scale of livestock breeding should be regulated. Meanwhile, the development scale of high water consumption and heavy pollution industry such as textile, paper and paper products should be restrained while cleaner production technology for industry improvement and innovation should be adopted. Multiple water supply mechanism should also be established to guarantee the water level in Baiyangdian and reduce groundwater exploitation. Water pollution treatment facilities and the rate of water resource utilization and sewage reuse should all be improved too. Moreover, forests and wetlands need to be restored and high-standard pollution control should be performed in Baiyangdian Basin so as to coordinate the development of economy, population and environment.