Sustaining the water supply in megacities is an enormous challenge. To address this challenge, it is especially important to predict water demand changes in megacities. This paper presents a system dynamics model to predict the future water demands of different sectors considering multiple factors, including population, structure of the economy, and water supply and use technologies. Compared with traditional methods such as the time series method and structure analysis method, the proposed model takes into account the interconnections, non-linear relationships and feedbacks between the various factors in a systems context. The model is applied to Beijing, a megacity with a population over 20 million and very limited water availability. It is found that the total water demand is likely to increase by at least 36.1% (up to 62.5%) by 2030 compared with that in 2011, and the water deficits vary from −0.36 × 109 to 1.80 × 109m3 in 2030. In addition, scenarios are designed to account for impacts associated with economic development, climate change and inter-basin water transfers. It is shown that climate change may have a large impact on the water supply reliability in Beijing. The water shortage problems can be alleviated via inter-basin water transfers.