Based on the data from 117 sampling plots, the relationships between plant species diversity, biomass, and the groundwater table in the Hailiutu River basin were investigated. The main findings of this study can be summarized as follows: 1) The value and species composition of herbs in the plant community are greatly affected by the groundwater table and geomorphic type. In the flat land of river beds or lake beaches, a decrease in the groundwater table, resulted in a shift in dominant herbaceous plants from Carex duriuscul, Achnatherum splendens, Iris lactea var, Setaira viridis, to Puccinellia tenuiflora in sequence; however, on the slope of the sand-dune, the dominance was shown from Stipa grandis, Psammochloa villosa, Agriophyllum squarrosum to Astragalus adsurgens in sequence. 2) The species diversity and richness of the herbaceous plant community had a maximum value when the groundwater table was 1.5 m; therefore, the region with the depth of groundwater table at 1.5 m is the most suitable region for the herbaceous plant community growth and development. The species diversity and richness of the herb layer were significantly higher than those of the shrub layer when the groundwater depth was less than 5.0 m. However, when the groundwater table was greater than 5.0m, the species diversity of the herb layer was lower than that of the shrub layer. 3) The correlation among herbaceous plant diversity, richness, and biomass was not significant; in the flat land of river beds or lake beaches, the herb layer aboveground and underground biomass had a maximum value when the groundwater table was 1.8 m with simple plant community structure. However, on the slope of the sand dune, the aboveground biomass reached the highest value when the depth of groundwater table was 5.0 m, but the underground biomass was at a maximum when the groundwater table was 3.5 m. In conclusion, we found that there was no simple linear relationship among plant diversity, plant biomass, and groundwater table. There is an optimal ground water table level for both plant diversity and biomass: values higher or lower than this value will cause a reduction in plant diversity or biomass.