Abstract: It is technically feasible to carry out the intercepting underflow and artesian diversion project to utilize the abundant groundwater resource in the arid and semi-arid alluvial plain areas. But few instances or reports have been put into effect. The establishment of intercepting underflow project can extremely easily cause immersion and ecological environment deterioration. In this paper, the intercepting underflow and diversion project in Jia County is taken as an example to discuss the reasonability of the utilization scheme in the aspect of the environment effect. Based on the investigation and evaluation of ground water resource, the prediction of immersion scope of study area during the dry season is presented by three-dimensional numerical simulation method. Based on comprehensive analysis of the hydro-geological condition in the study area, the immersion scope is examined by the analogy method. The preliminary study on water pollution is conducted with influencing factor analysis method. The prediction of seepage deformation of base is performed using analytical method. The results show that it is not proper to conduct the intercepting underflow and artesian diversion program due to the serious environment effects that can be caused by this scheme. Correspondingly, new development programs and countermeasures are proposed to meet the water supply requirements and to avoid the environmental effects.