Abstract:The purpose of this paper is to understand the reform of water management institution in the irrigation districts in the Yellow River Basin and its effect on water saving. Research results show that since the 1990s, collective water management institution has been replaced by Water User Associations or contracting management. However, nominal reform has no effect on water saving; only those institutions providing incentive to managers can save water. In addition, the participation of farmers also has no significant impact on water saving.