With the development of computer technology, groundwater numerical simulation technology also gradually developed, and has become an effective tool for quantitative assessment of groundwater. Currently, foreign study in the field mainly aimed at the numerical simulation method and the weak link, new mathematical tools and software development. At present, MODFLOW is the most widely used groundwater simulation software. China began groundwater numerical simulation research in 1973, and has achieved some theory and the application results. Numerical simulation technology could be used to qualitatively and quantitatively describe uncertainty and ambiguity factors for groundwater system. Tuocheng County located in the east of Henan Province, the entire industrial centralizing zone is divided into two parts which lies in the overall plan within the scope of the west and north. Industrial centralizing zone in the land use is divided into three areas: built-up areas, development areas and control areas. Regional spatial structure and urban spatial development structure coincide; overall planning structure can be summarized as: two, three heart, 4-axis and four industrial district. Due to exploitation of local water resources, the soil and surface water of Tuocheng County have been severely polluted. The negative environmental impacts caused by three main areas: the underground water level continued to decline, the steady decline in groundwater storage, urban drinking water safety is threatened; The reservoir and water supply conditions deteriorated along with the increase of channel foreword; the deterioration of water existence trends, industrial waste, sewage, pesticide, fertilizer and so on pollutants affect groundwater quality safety. In current study, we took Tuocheng County as study area, we developed a concept model to describe local hydrogeology and a mathematic model to simulate the movement of groundwater flow. By solving these two models, with additional data of regional industrial planning, pollution characteristics, soil and groundwater monitoring results, and correlations between groundwater pollution in contaminated sites and (1) land use and development or (2) local industrial layout. Through parameters rate set, model predicts, and prediction of water level and the water balance, we try to select a minimum of water damage, but also conducive to environmental protection programs. In the simulations, the four schemes were considered(F-01、F-02、F-03、F-04), by means of analysis of each scheme, model projections indicate that, with the increase of pumping time and groundwater recharge area, program F-01 can reach the maximum balance eventually, this program can be incorporated into government decision-making. Environmental impact of groundwater exploitation includes three aspects: groundwater pollution, geological disasters, and also ecological hydrogeology problem. In addition, in order to effectively protect the groundwater environment of Tuocheng county, protection of water resources, protect the environment, this paper put forward the following Suggestions on the future exploitation of underground water: effective control groundwater exploitation, strengthen groundwater dynamic monitoring work, realize the reasonable development of groundwater, propaganda to save water, and establish water-saving society. This study provides scientific evidence, as well as new scientific method, for government to make decisions in regional development, land utilization, and environmental management.