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Effects of agricultural activities are obvious in arid-inland regions. A numerical model for two-dimensional phreatic groundwater flow was developed based on the water budget in the Minqin oasis, a typical arid-inland region. The spatial data of source/sink terms were processed by combining global infomation system (GIS) and the finite element subsurface flow (FEFLOW) model. T he verified results showed errors for the model of 0.37 and 0.48 m respectively in the Quanba and Huqu areas. The groundwater level changes were simulated with the developed model. The results indicate that groundwater level maintained a decreasing trend of 1.8 and 1.1 in year(-1) respectively in the Quanba and Huqu areas under current water resource utilisation. Therefore, further study is needed to determine the rational exploitation volume of groundwater and distribution schemes for surface water.