Abstract: The paper analyzes the competitiveness and the mutative extent of urban expansion restricted by water resource, according to the situation of water supply and scarcity of the seven cities of Hexi corridor in the arid areas of northwest China. The relationship between the acceleration of urbanization and the scarcity of water resource is incompatible. Most cities of Hexi corridor is badly short of water, and the water utility is generally inefficient in these areas. Development process of the cities is evidently a mode of urban growth in arid areas. With the restrict of water resources, the characteristics of the cities expansion give priority to the gross expanding, and the extent of the agricultural population transferring to the non-agricultural and land-use expansion is large. At the same time, it is also the main method of the expansion that high consumption comes along with low benefit, that is to say that the benefits of input and output of water and soil resource is generally low. The development of the cities is in a low phases which is mainly driven by resource exploitation, and the expanding quality is under promotion. The compositor of the competitiveness from the strong to the weak is Jiayuguan-Zhangye-Jiuquan-Jinchang-Wuwei-Dunhuang-Yumen. In the future 30 years, the amount of population living in cities and the land areas of urban built-up regions will centralize and increase step by step restricted by water resource. The net increase of the gross of population in cities will be 1.14×10¹⁰, with 8.7×10⁵ non-agricultural residents in cities and 7.47×10⁵ in the urban areas. The net increase of built-up regions is 85.14 km², and the level of urbanization is 35.14%。Metropolises and megapolises will not come forth with steady administration system. Middling cities will still be Wuwei, Zhangye, Jiuquan, Jinchang, Jiayuguan. And small cities will be Dunhuang, Yumen, Yongchang. To insure the competition and expansion be in order, the advice is persisting in the theory of people-oriented and taking water as the lifeline and economy develop as driven force, and taking city programming as the legal rule. It should be the first to develop, and then to expand. It is also important to improve the quality of urban expansion under the rules and restrict of water resource. The characteristics and individuality of the cities should be stood out, making sure about sustainable development.