Abstract: With the deepening of water tariff reformation, two-part water tariff system has been improved and its application is more extensive, producing a positive effect. However, insufficient understanding of its implementation condition and application effect affected the promotion of the water tariff system. In this paper, the connotation, policy basis and theoretical basis of two-part water tariff are introduced, and its implementation condition and application effect are also discussed emphatically. The implementation of two-part water tariff can improve the use efficiency of water conservancy funds, promote establishment of a balanced compensation system between water supply costs and charge fees, improve water supply management ability and give full play to the role of two-part water tariff in water conservation and optimal allocation of water resources.