Abstract: A simulation model of groundwater flow is developed on the basis of analyzing the dynamic data accumulated for many years and the features of reservation/discharge function of groundwater system in Shenyang's urban area planning. The model is disintegrated to find the nonlinear response matrix which is iterated to be a group of linear response matrices, then they are superposed to become a 2-order mixed response matrix. Thus, an optimal management model is developed for effective utilization of groundwater, of which the objectives are to control the continuous drawdown of water table in the area, minimize the extension of drawdown funnel and control the influence of surface water pollution on groundwater to meet the requirement of watersupply for Hunnan New District. The optimization result shows that the exploitable quantity of groundwater can increase by 12.98×10⁴ m³/d. The groundwater resources management is thus optimized and available to support and provide a resonable zonal layout for groundwater exploitation and water table conservation.