In arid and semi-arid regions，the upper reaches of inland rivers provide most of water resources for the middle and lower reaches due to their abundant precipitation and glacial runoff. The streamflow from the upper mountainous regions is usually used to maintain the economic-ecological balance of the middle and lower oases. The ecological problems of the mountainous areas in upper reaches of inland rivers have been prominent in recent years. Government departments have carried out a series of ecological restoration measures to exert a significant impact on surface vegetation，thereby changing the state of ecosystem，affecting regional hydrological process，and causing a series of water-ecology-economy chain reactions throughout the region. Therefore，there is an urgent need to clarify the impact of vegetation dynamics on streamflow generation and ecological balance due to ecological restoration，and to explore the ecological restoration solutions that can balance the functions of “water tower” and “ecological barrier” in upper reaches of inland rivers. The gradual improvement of vegetation data subject to remote sensing and regional-scale dynamics has made it possible to effectively assess the impact of ecological restoration on runoff generation and ecology in upper reaches of inland rivers. In this study for the upper reach of Heihe River，vegetation dynamics data based on remote sensing are combined with the Eagleson eco-hydrological model at the regional scale to explore the effects of vegetation dynamics on rainfall runoff generation and ecological balance during the growing season from 1992 to 2015 by designing simulation experiments. The results show that：If model simulations are conducted at current resolution according to regional-scale remote sensing and reanalysis data，then the vegetation currently may not be fully adapted to the regional climate and soil conditions，and can still be subject to further restoration and adjustment in most areas. If the regional vegetation dynamics are planned according to the eco-optimal theory，then the vegetation can be adapted to regional climate and soil conditions，effectively increase the rainfall runoff generation in upstream mountainous areas while maintaining the dynamic balance of regional ecology，alleviating water resource conflicts and taking into account the “water tower” and “ecological barrier” functions.