Institutions are the causes of many water problems.The unreasonable institutional set-tings result in low efficiency and high transaction costs of the system,as well as many water problems.But the institutional options for the water problems could not be fully addressed by the water sectoral reform,because institutional reforms are not only controlled by the sector. This paper analyzes the water problems and put forwards counter measures in the Shiyang River basin from an institutional aspect.Based on the reviews of current water resources development and utilization, and management institution,it identifies that the problems in water resources management in the river basin are that the traditional development model resulted in severe sectoral water shortage,regional and secotral management institutions caused frequent water conflicts between upstreams and downstreams,the neglecting and forcibly occupying environmental water usage aggravated the eco-environment,the nontransparent subsidies distorted water tariff and demand,etc.Therefore,to address these problems,it should implement integrated management of water,land and forestry resources,formulate"Shiyang River Basin Management Regulations",reform current management institutions,and develop transparent subsidy and rational pricing mechanisms.The paper also suggests to expand the functions of Shiyang River Basin Management Bureau.