Water scarcity has been the main restraint factor for the development of oasis cities around the world. Urumqi, a typical oasis city in arid northwestern China, is facing an increasing water shortage with rapid development over the past decades. In this paper, we use a system dynamics method and multi-scenario simulation to predict the water-resource demand and the supporting capacity of water resources for the urban development of Urumqi under different scenarios. The results show that existing water resources can hardly meet the needs of urban development. Even if water transfer and saving projects are adopted, in the medium and high-speed development scenarios, there will still be a large water deficit in Urumqi in 2030. Also, to relieve the constraint of water resources on urban development, both water-use structure and industrial structure should be optimized. It is suggested that the demands of ecological water and domestic water are given a primary guarantee; that the proportion of industrial water should significantly increase while drastically decreasing the proportion of agricultural water; that the development of secondary industry should be strengthened while reducing the proportion of primary industry; and finally, restriction placed on high-water-consuming industry while encouraging low and medium water-consuming industries.

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