Abstract: Caoe River basin is one of the richest river basins in water resources along the shore of East China Sea,and is one of the rivers with the most frequent flood disasters.This paper is focused on the effects of water-resource projects on terrestrial and aquatic environment,especially on the carrying capacity of water environment.It has evaluated the importance of these water-resource projects in utilization of the nature water resources.It also pointed out how to prevent the sideeffect of those projects.It provides impo tant data for scientific research in the following a spects.(1) The water-resource projects influence the distribution of runoff in space and time and balance the runoff among different seasons.The suspension load,sediment discharge,and sediment flux have all been reduced by 10% to 20% in the down river of the reservoir.(2) These projects have protected the natural botanical zone a round the reservoir,changed the local climate,and improved eclolgical structure and functions of the local farmland.They also influenced the growth of aquatic organism which increases the productions of fishing and other aquatic products.(3) These water-resou rceprojects have both positive and negative effets on the carrying capactity of water environment.They increased the carrying capacity during drounght season while decreasing it dring flood season.The tendency of balancing the carrying capacity of water environment among different seasons plays an imporant part in improving environmental quality.