Wise and sustainable uses of water resources are essential for an effective river-basin-management planning. Recent management strategy further addresses the fact that quantity and quality of water are closely interrelated, and both must be considered simultaneously for all water resources and water quality management practices. The aim of this paper is to explore the impacts of water resources redistribution and pollution prevention actions between and within river basins simultaneously in South Taiwan. Much emphasis will be placed on assessing the impacts of water transfer over natural boundary to satisfy the needs of industrial development in the Tseng-Wen River system and its resultant influence on the water quality in the downstream area of the Kao-Ping River system where the pollution prevention program is to be implemented. The Kao-Ping River was further characterized hydraulically and environmentally, based on a full investigation of discharges and withdrawals in the river reaches. QUAL2E was successfully calibrated and validated using data collected between 1998 and 1999, and the model was capable of predicting the concentrations of biochemical oxygen demand, dissolved oxygen, total phosphate-phosphorus, and ammonia-nitrogen (NH3-N) for the entire river system. With the aid of QUAL2E simulation model, it shows eliminating the pig farming activities and constructing the sewer systems in the upstream area of Kao-Ping River cannot guarantee the full compliance with water quality standards in the downstream area and water transfer in the upstream area further increases negative impacts on the water quality in the wet season. The predicted situation of water quality in the dry season may even present worse condition. Additional water pollution control policy, such as the use of economic instruments, for controlling and reducing the waste-load of biochemical oxygen demand and ammonia-nitrogen is needed in the Kao-Ping River system in the long run.