The techniques of geophysical prospecting and drilling are used to study the hydrogeological structure and the conditions of groundwater recharge, runoff and discharge in Shuhe Basin. A hydrogeological model has been set up, and an assessment on the groundwater exploitation potential and groundwater quality was made by means of GMS software numerical simulation and Nemoro comprehensive index method. The results show that the aquifers in Shuhe Basin are anisotropic, and can be divided into two waterrich zones according to the thickness of aquifers; atmospheric precipitation and lateral inflow of river are the main recharge ways of groundwater; artificial groundwater exploitation is the main discharge way, the balance of groundwater is 2312.85 ×104m3/a. By simulating the changes of groundwater under different exploitation schemes, the groundwater exploitation potential is 61×104m3/d. The areas in which groundwater quality is superior to Ⅲ level account for 71.4% of the total area, which basically meets the water quality requirements of water supply.