Abstract: The regulation and storage capacity of an underground reservoir is defined with the viewpoint of keeping ecological balance,the sustainable development and utilization of water resources of a watershed. Then the index system of the compre-hensive evaluation on regulation and storage capacity is established. Furthermore,this paper presents a recognition model of fuzzy pattern with cross iteration for multi-objective and multi-layer system to assess the regulation and the storage capacity of an underground reservoir on condition that the index correlation is eliminated. The model can consider qualitative and quantitative indexes and determine the index weights in multi-objective system through combining cross iteration results with the experience and preference of the decision makers. Finally,the model is applied to evaluate and optimize the regulation and storage capacity of the underground reservoirs in the lower watershed of Liaohe river. The case study shows that the new framework and methodology are scientific,reasonable and easy to use in practice.