This paper presents basic water resource and environment issues in the arid regions in the northwest of China. The first part reviews the water resources situation. The major water resource in the arid region in Northwest of China is surface water. Runoff distribution and relative features are the second part. There are many characteristics of surface water, such as heterogeneity of temporal and spatial distribution, diversity of runoff alimentation, and frequent exchanging between surface water and groundwater. At the third part, as is the most important part of this paper, the ayther studys the general eco environment situation in the arid regions in the Northwest of China through three typical inland watersheds. The situation is improved in the oasis but worsening outside oasis. Worsening cases include land desertification, glacial recession, lake drying up, river drying up in the lower reaches, higher frequency of dust devil, large area degradation of natural grasslands and natural vegetational cover damage. Water is needed to meet these challenges. At last part of this paper, a suggestion is given to the eco environment construction in the arid region. The suggestion is that water use should be divided into two parts: for ecological use purpose and for national economics use purpose, respectively. As to different typical cases of eco environment deterioration occurred in the lower reaches of Tarim river, Erjina region of Heihe river and Minqing region of Shiyang river, these water use insights should be dealt with carefully with different stress respectively.