In line with the principles of urban water pricing and under the uideline of water price reform, this paper applies the theory of demand elasticity to establish an econometric model of multistep water pricing for urban residents based on normal distribution hypothesis, and further works out the evaluation criterion, which can be used to assess various multistep water pricing modes so as to scientifically determine the price of urban household water consumption. The multistep water pricing proposed at a public hearing on water price for Beijing residents in 2004 is taken as a case study, and the study shows that the price ratio of 1∶3∶5 based on three grades of water consumption is better. Other modes are further analyzed and concluded that the water price difference between the second and the third grade has different impacts on water price reform. Finally, corresponding measures and advices on urban water pricing are given.