Abstract: Based on the evaluation of water resources carrying capacity, especially taking into account the impact of agricultural pollution on sustainable use of water resources, a comprehensive analysis was conducted on the strains of water resources due to farming and animal production in different regions of China to provide reference for rational estimation of potential agricultural growth and correct approaches for structural adjustments in agriculture. Excess nitrogen and grey water were calculated as indicators to quantify the impact of agricultural pollution on water resources. Following nutrient balance theory, excess nitrogen was the difference between the sum of nitrogen provided by chemical fertilizer, livestock manure and soil, and total nitrogen needed by farming. Grey water was the amount of water required for diluting excessively high concentration of nitrogen in water to a more environmental-friendly level. Agricultural water footprint was the sum of agricultural water and grey water used. The huge quantity of excess nitrogen produced by farming and livestock consequently led to excessive amount of grey water, which more than doubled the amount of water used in agriculture. There was therefore the need to reserve enough environmental space for diluting pollution when estimating water resources carrying capacity based on water sustainability and healthy development. Water surplus were constructed to reflect the potential of water resources to support agricultural production with detailed environmental consideration. Water surplus was the difference between water resources and agricultural water footprint. Using 20032012 nationwide samples, a panel data model was constructed to analyze the impact of change in sown area and livestock head on water surplus. The results suggested that the nationwide water in China could carry a maximum of 168.89 million hm² or 3.57 billion pigs. The water resources carrying capacity model results also showed that the negative effect of increasing planted area was larger than that of increasing livestock amount. When the planted area increased by 1.00%, water surplus decreased by 14.86 billion m³. Then when livestock increased equally by 1.00%, water surplus decreased only by 7.84 billion m³. The reason was that besides the amount of water needed for growing crops, the large quantity of grey water used to dilute excessive chemical fertilizer superposed its effect on water surplus. Given limited arable land resources, increasing planted area was only possible by reclamation of marginal lands and cropping index farming. Expanding the amount of livestock mainly relied on increasing breeding scale. The production of grain and meat had already met the goal of modern agricultural development plan in the “12^th 5-year Programming”. Thus to better satisfy the needs of residents for food diversification, it was necessary to allocate more cotton, oilseeds, fruits and vegetables to plowed lands. The quantity of cow breeding also needed expansion. It was hard to build an optimistic view over the carrying capacity of the existing water resources. Production scales in Hebei, Shanxi, Jiangsu, Henan, Shandong and Ningxia provinces exceeded the upper limit of their water resources carrying capacity. Yangtze River Basin and South China had more room for expansion of agricultural production. It was critical that the choice of each province was reasonable and based on a realistic agricultural structure of comparative advantage. The implications for policy development were as follows: 1) guiding agricultural production transfer to areas with larger water resources carrying capacity; 2) when subjected to environmental constraints for agricultural growth, considering trade as an alternative to satisfying consumer demands; and 3) developing new environmental technologies in agricultural production and improving regional water resources carrying capacity. At the same time, there was need to realize inter-regional allocation of water resources through the construction of water conservancy facilities.