The Nandong Underground River System is located in a typical karst area in the southeast Yunnan Province, China. It is a major feeding source of Lujiang River, a tributary of Zhujiang Rive, with a drainage area of 1684 km2, which is the second ultra-large underground water system in China with annual average runoff amount 3.542 billion cubic meters and has a great potential exploitation water resource. However, with the rapid increase in population and expansion of land use, groundwater quality has degraded. Meanwhile, ecological environment problems such as rocky desertification, soil erosion and so on are also very prominent in Nandong Underground Water basin. In order to rational exploit the groundwater resource and treat the environment problems in Nandong underground water system, Chinese Government has devoted huge manpower and material resources. A geological survey and research project was started up by China Geological Survey to find hydrogeological characteristics and comprehensive exploitation strategy for Nandong underground river system from 2014 to 2015. Included used controlled source audio-frequency magnetotelluric and large power mise-à-la-masse methods to find underground river main ducts, used fluorescein sodium tracer test methods to research the medium property of groundwater etc. Mainly results up to date show that the system has three main underground river ducts in the lower reach and has an annual average of 433.5 thousand tons sediment discharge from the total drain outlet. Karst rocky desertification area was up to 642 Km2, which is over 38% of the total watershed land area. It is therefore necessary to take a scientific and reasonable measure to management the basin. Furthermore, the most rational exploitation policy of the ground water is to build an underground dam in Moshi Valley in the lower reach.