Taking Poyang Lake and its watershed as the study subject, the physical structure and relationships of the basic elements of the whole basin system were constructed by the system dynamics(SD) approach, simulating and analyzing the water balance process of Poyang Lake Basin. Taking the years from 1978 to 1997 as the calibration period, and the years from 1998 to 2007 as the validation period, the simulated value and the measured value of the runoff and lake level of five river basins of Poyang Lake were compared and analyzed. The results indicate that adopting the SD approach can acquire an ideal performance on the simulation of basin runoff and water exchanging process between rivers and lake. Then we simulated the system response with 10% decrement and increment of precipitation, temperature and water usage in Poyang Lake Basin. The effects ratio of precipitation, temperature and water usage is 1∶3∶10. Precipitation influences the basin hydrological and water resource process by controlling surface runoff, while temperature by affecting evapotranspiration and soil water storage. This research has quantitatively explored the response of every links of water change in the whole basin to climate change and human activities, reflecting the interaction of various components in the basin system.