This study was carried out in a typical small watershed of the Taihu Basin. The aquifer calculation parameters were identified through systematic field experiments on near-surface geological features and analysis of near-surface soil and rock structural features. The three-dimensional groundwater numerical simulation method was used to generalize the hydrogeological conditions, and to identify and verify the model parameters. The results show that the surface water recharge to groundwater is approximately twice the groundwater recharge to the surface water, and the interaction between the surface water and groundwater in stream-type watersheds tends to be unidirectional. That is, the river water recharges groundwater. In terms of the change of water storage in the aquifer, in addition to evapotranspiration, water loss through the underground passage accounts for a large proportion of the total water amount, and the reduced groundwater storage is recharged mainly by rainfall infiltration. The established model can well reflect the actual hydrogeological conditions of the study area. It has been used to describe the change process of the interaction between the surface water and groundwater, and to quantitatively study the dynamic changes of the basin water balance. In addition, it can provide a basis for the prediction and analysis of groundwater protection in changing environments and groundwater undercurrent calculation of lake areas.