Water environmental degradation is a major issue in the Heihe River Basin belonging to the inland river basin of temperate arid zone in northwestern China. Mankind's activities, such as dense population and heavy dependence on irrigated agriculture, place immense pressure on available and limited water resources during the last century, especially the recent five decades. An investigation on the water environmental degradation in the Heihe River Basin and analysis of its causation were conducted. The results indicated that water environmental changes in the whole basin were tremendous mostly in the middle reaches, which reflected in surface water runoff change, decline of groundwater table and degeneration of surface water and groundwater quality. Some new forms of management based on traditional and scientific knowledge must be introduced to solve problems of water environmental degradation in the Heihe River Basin.