Total capacity control and target management on water quality as effective ways to implement “The Action Plan for Prevention and Treatment of Water Pollution” and “River (Lake) Chief System” are optimal management approaches for the comprehensive water pollution treatment and water quality protection of Lake Dianchi. On the basis of a good understanding of the water resources condition and unique water cycle in Dianchi Lake catchment under varying circumstance, we re-modeled the water environment capacity and analyzed the spatial-temporal dynamics of water environment capacity in Dianchi Lake via a fine-tuned numerical model. Furthermore, we proposed to control the water quality limits for each partition and time period, and set up fine management plans for the control of water quality into the Lake. The research achievement provides a technical support for comprehensively promoting the River Chief System in Dianchi Lake.