Affected by climate change and human activities,the water environment in watersheds has changed greatly. Numerical simulation is an important approach of planning, managing and protecting water environment as it quantitatively describes the evolution of water environment. The major simulation models (surface water environment model, groundwater environment model, and non-point source pollution model) are summarized, and the applications of simulation technology are presented in terms of the evolution and regulation of water environment, the impact of hydraulic engineering on water environment, the design of water pollution control projects, and the planning and management of water protection. Moreover, the shortcomings of the current simulation technology are analyzed, and the development prospects are proposed.