Last century 50 - 70 years, the dam construction of Shiyang Inland River Basin (SIRB) profound impact on the distribution of water resources and arable land in the basin. Through data collection, field surveys and remote sensing image interpretation, we analysis the use of land and water resources change process in the middle and lower reaches of SIRB in recent decades. The results show: (1) The cultivated area of SIRB has been an upward trend in recent decades, The whole basin cultivated area has increased total 229,000 hm² from 1973 to 2010 and mainly in the middle and lower reaches. Midstream increased by 149,700 hm² accounting for 65.36 percent of total, downstream increased by 70,000 hm² accounting for 30.70 percent of total. (2) The amount of surface water resources of downstream reduce significantly gradually since dam construction, and the water table sharp decline. While the volume of surface water resources come downstream from the 1950s accounted for 30 to 40 percent of the total gradually reduced to less than 10% in 2012; (3) since the arable land area of middle and lower reaches of SIRB basin substantial increase, so the surface water resource does not meet irrigation needs. Agricultural irrigation relies heavily on exploitation of groundwater to supplement, resulting in Regional Groundwater Depth dropped rapidly, and forming several huge funnel groundwater settlements. 20 years from 1981 to 2001 the groundwater level of midstream dropped from around 5m to around 10m in Wuwei, and in Minqin dam-region of downstream along faster rate of decline in 20 years fell from 8.52 m to 22.68 m. Dam construction project has changed the pattern of the basin water cycle, the middle reaches closure a large number of surface water resources led to downstream sharp decline. Downstream continued exploitation of groundwater formed a few huge funnel groundwater settlements, it caused serious ecological problems. The basin should adjust the industrial structure and develop water saving irrigation, promote a virtuous cycle of water resources, to achieve sustainable development, seek a sustainable development ways conversion natural oasis to artificial oasis efficiency in arid zone.