Water cycle changes and impacts on water resources in arid regions is a central issue as environmental change and adaptation is concerned. Using Xinjiang Uygur Autonomous Region in western China, one of the driest regions in the world as an example, we have investigated this issue in the past decade. The study area included major catchments, e. g. Tarim and Jungar basins surrounding the Tianshan Mountains. The investigation was at the catchment scale. Methodologies have included precipitation monitoring, analysis of hydrological observation data, as well as Hydrogeological testing. Results show that, caused by the rain shadow effect by the rising of Himalayan and Tianshan mountains,moisture source of precipitation comes solely from the westerlies ; recycled moisture takes up only 8% in the local precipitation, incapable of forming large rainfall ; the dryness of the region has been caused by both effects above. Tianshan Mountains dominate the regional water cycle, due to its higher precipitation, rich ice and snow storage in the glaciers. Under climatic changes, both of air temperature and precipitation have increased and glacier melting has speeded. As a result, since 1996 as compared to the mean of previous 40 years, runoff from the mountains has increased by 10% on the average and up to 40% for some rivers sensitive to climatic change, causing heavy flooding. Water cycle in the lower reaches of the rivers, on the other hand, is controlled by surface water, due to the fact that there is essentially no rainfall there. Groundwater-dependent ecosystem has deteriorated seriously as a consequence of dried out river channels. The water diversion project in Tarim River was just a unique groundwater recharge test at a very large scale,serving as a good proof of such mechanisms,evidenced clearly by Tritium and stable isotopes. Oasis at the mountain front, where water resource is heavily utilized, is the most suitable location for water resources regulation as an adaptive measure towards environmental changes. Making use of the 10% increase in mountain runoff, groundwater recharge to aquifers in the foreland basins can be enhanced through infiltration ponds, and the aquifers can serve as reservoirs to store and supply water for agriculture when needed. Drawing from the wisdom of ancient Karez systems, the groundwater reservoir built in Tailan river basin is a successful pilot. Studies show that the groundwater there has secured modern recharge. Water relocation at the catchment scale is necessary to ensure the stability of ecosystems in the lower reaches of the rivers,and the Tarim River case has indicated that, the range of affected groundwater is limited within a few hundreds of meters from the riverbank, though the usefulness of the water diversion project was positively assessed.