As the water industry has led to inefficient monopoly, the market has become an inevitable trend in the water industry. Carrying out market-oriented reforms, we should adhere to three principles, namely focusing on the public interest, the Government funds in the investment structure irreplaceable, and balance between efficiency, equity and stability. In the market-oriented reforms often encounter the following impediments: the conflict between the new and old systems, dispute the right of the departments, price increases experienced public resistance. Learn from the successful experience of foreign countries in the basis, we proposed recommendations, specifically including improvement of relevant laws and regulations, strengthen water administrative reform, continuing to promote diversification of property rights reform, promoting investment and financing system optimization.