Abstract: Based on the panel data of 30 provinces in China from 1998 to 2015, the dynamic evolution of urbanization and water consumption and their nonlinear relationship were analyzed using the Kernel density estimation function and non-dynamic panel threshold regression model. The findings of the research are as follows. First, the ratio of national urbanization shows polarization. Urbanization in eastern, central and western areas differs from each other because of economic development and other factors. National water consumption has been brought under control. But, water consumption of high-consumption provinces in eastern, central and western areas is still on the rise. What's more, with the growth of economic development and residents' income, urbanization exerts an inhibiting effect on water consumption. In eastern areas, because of economic development, urbanization has a promoting effect on water consumption. In western areas, the threshold effect is the same as that in the whole country and the inhibiting effect is rising. Last, residents' income, capital stock and human capital are positively related to water consumption, while economic development is negatively related to it.