Multiple demands for water for large agricultural irrigation schemes, increasing industrial development, and rapid urban population growth have depleted downstream flows most of the time in the arid Heihe River Watershed, Northwest China, causing shrinking oases and tensions among different water jurisdictions and ethnic groups. To address this pressing issue, the State Council of the People's Republic of China has issued an executive order to mandate the release of water downstream for ecosystem restoration. This paper describes the adaptation of the Distributed Large Basin Runoff Model to the Heihe Watershed to gain an understanding of the distribution of glacial/snow melt, groundwater, surface runoff, and evapotranspiration in the upper and middle reaches of the watershed. The simulated daily river flows for 1990-2000 show that Qilian Mountain in the upper reach area was the main source of runoff generation in the Heihe Watershed, and annually, the Heihe River discharged about 1 נ109 m3 of water from the middle reach (at Zhengyixia Gage Station) to the lower reach under the normal climatic conditions (with a likelihood of 50 %). These flows are consistent with the State Council's mandate of delivering 0.95 נ109 m3 water downstream annually. However, the river flow would be significantly less under the dry climatic conditions, making it much more difficult to deliver the mandated amount of water downstream for ecosystem rehabilitation.