To restore the degraded grass vegetation and reveal the best ratio of grass species for artificial restoration of the riparian zone of the Three Gorges Reservoir area, the local dominant species, Hemarthria compressa (H) and Cynodon dactylon (C) were used to investigate the growth and intraspecific and interspecific competition under different water conditions. On April 29, 2016, a pot experiment was conducted using a replacement series design in which H. compressa and C. dactylon were planted at seven ratios (H0C12, H2C10, H4C8, H6C6, H8C4, H10C2, and H12C0) under three water treatments, including normal growth water condition (CK), flooding at 10 cm above the soil surface (SF) and flooding at 2 m above the soil surface (TF). Results showed that:(1) Regardless of the planting being a monoculture or a combination of the two species, biomass production of both species decreased under water stress. H. compressa was more sensitive to water stress than C. dactylon; (2) There was a density-dependent effect on the growth of both species and this effect was stronger on C. dactylon; (3) Under all three water treatments, the relative yield total (RYT) was greater than 1 when both species were planted. Under CK, the two species showed a competitive relationship, whereas under SF and TF, they were facilitated by each other. Taking maximizing biomass production, the root:shoot ratio, and the competitive ability of the species into consideration, we suggest that under CK, the best ratio for planting of H. compressa and C. dactylon is 2:10, whereas under SF and TF, the best ratio is 8:4. These results provide a baseline reference for vegetation restoration and reconstruction in the riparian zone of the Three Gorges Reservoir area, and provide a theoretical reference for the establishment of artificial grass vegetation in similar areas.