In order to reveal the groundwater movement rule of peatland, using a typical peatland watershed in the upper Heihe River in the Zoige Basin as an example, a numerical model of groundwater movement along the headward erosion channel in the watershed was set up based on Visual MODFLOW, and the groundwater dynamics under different channel morphologies were simulated. The results show that groundwater movement in the peatland is influenced by precipitation, gully, and terrain. The increase of precipitation will accelerate the movement of groundwater to the gully, and the movement speed reaches the maximum after the peatland reaches saturation, and the effect of precipitation is weakened. The increase of gully depth will speed up the rate of groundwater discharge and enlarge the area of drainage zone, and the drainage capacity of the gully after cutting through the peat layer is 3.21 times that of the gully without cutting through the peat layer. There is a significant linear relationship between groundwater hydraulic gradient and topographic slope.