Field experiments were conducted in the lower reaches of the Heihe River basin in the northwest of China to determine relationships between stream and groundwater and to quantify stream lateral seepage. The water table fluctuation, water balance and statistical analysis methods were used to analyze long-term experimental data. Results showed that the groundwater depth along the experimental section responded strongly to the streamflow of the East River in the basin. The streamflow of the East River in all periods significantly influenced the amplitude of groundwater depth within the range of 300 m from the riverbank; the stream lateral seepage was mainly controlled by the streamflow and its durations. The evapotranspiration of riparian forest had used larger proportions of groundwater storage in summer, close to approximating 60%. This study quantified stream lateral seepage to groundwater for different water conveyance and provides support for regional water resources management in an arid inland river basin.