The Shangzhou Basin, a principal groundwater development region in the Shangzhou District of China, is also a vital water sourceSource protectionProtection zone for the South-to-North Water Diversion Project. In recent years, escalating groundwater exploitationExploitation has posed significant and irreversible risks to the local ecology. This study introduces a numerical modelModel, based on MODFLOW, constructed specifically for this region. This modelModel serves to assess the permissible groundwater extractionExtraction volume, thereby offering robust support for the sustainable utilization of these resources. Under current extractionExtraction practicesPractice, the total annual groundwater rechargeRecharge and dischargeDischarge in the study area are 25.81 million m3 and 27.80 million m3, respectively. The balanceBalance discrepancy between rechargeRecharge and dischargeDischarge stands at −1.31 million m3/a, suggesting that the region is in a state of generally balanced state. Water exchangeExchange between groundwater and other water bodies predominantly takes place in the valley terrace area. The simulation results align closely with the existing water resourceWater resources utilization status in the study area. Building on this, various extractionExtraction scenarios were established to forecast groundwater changes over the next decade (2020–2030). The maximum allowable extractionExtraction volume for the Shangzhou Basin area is determined to be 16 million m3/a. This research fundamentally supports the sustainable developmentSustainable development and management of groundwater resources in the Shangzhou Basin.