This paper uses system dynamics to analyse the structure of water supply and demand system of urban water resources.The supply and demand system contains four level variables,in-cluding population(POP),industrial output (IO),the total supply of water resources(TWQ)and the total quantity of polluted water resources(PWQ).Among them,the TWQ is the dominant one,which is determined by two rate variables,i.e.,the water supply rate and the polluted water pro-duced rate.In the system,water price and the investment for polluted water treatment are the key assistant variables.The functions of these two assistant factors are fully considered.And we can conclude from the outcome of the system that sustainable utilization of urban water resources can be realized if the two factors harmonize with each other.Taking Changchun City as an example,which was one of the cities that water supply was the main factors constraining her development,and water pollution was serious,the paper analyses supply and demand dynamic system of urban water resources,and introduces the scenario to solve these problems.