Water is a primary controlling factor for economic development and ecological environmental protection in the inland river basins of arid western China. And it is groundwater, as the most important component of total water resources, that plays a dominant role in the development of western China. In recent years, the use-ratio of surface water has been raised, the groundwater recharge rate from surface water has been reduced, and groundwater has been exploited on a large scale. This has led to the decline of groundwater levels and the degradation of eco-environments in the Heihe watershed. Therefore, the study on the change in groundwater levels in recent years, as well as simulating and predicting groundwater levels in the future, have become very significant for improving the ecological environment of the Heihe River Basin, to coordinate the water contradiction among upper, middle and lower reaches of Heihe River Basin and to allocate the water resources. The purpose of this study is to analyze the groundwater-level variations of the Ejina region based on a large scale, to develop and evaluate a conceptual groundwater model in Ejina Basin, to establish the groundwater flow model using the experimental observation data and combining Modular Three-Dimensional Groundwater Flow Model (MODFLOW) and GIS software, to simulate the regional hydrologic regime in recent 10 years and compare various water-delivery scenarios from midstream, and to determine which one would be the best plan for maintaining and recovering the groundwater levels and increasing the area of Ejina oasis. Finally this paper discusses the possible vegetation changes of Ejina Basin in the future.