Different understandings and definitions of water supply capacity exist in practice from concepts to calculation methods due to many factors involved. The relevant concepts of water supply capacity were discussed and the key factors affecting water supply capacity were analyzed. Differences and linkages between a single project, a water supply system and the reginal overall water supply capacity were discussed. The meanings of water supply capacity in different situations were suggested. The relationships between water supply capacity and available water supply, water supply guaranteed rate and other related concepts were compared. Chengdu city was taken as an example, of which the regional water supply capacity was accurately accounted. Some suggestions were put forward for the calculation and application of related concepts in water supply capacity.