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Water shortage has become one of the severest problems in the middle Heihe River Basin because of high water demand but low available water supply. This paper is oriented to provide solutions to the problem through the analysis of drought. The main objectives to analyze the difference between water demand and supply in various water users in past, present (2000), and project (2010) situation, especially in agriculture, and the most important is to propose and assess a reasonable measure with the purpose of minimum drought and sustainable development. A simulation model, WAFLEX (Water Allocation Flow model in Excel) model is applied in this study to cope with water availability, distribution and requirement of various water users, and the result shows the model and the method is effective and feasible.