Abstract: The policy system of water environmental management in Lake Erhai Basin was sorted out, which included four categories: water resources spatial development and protection, paid use of water resources and ecological compensation, water environmental management and protection market, performance appraisal and accountability investigation, totaling 20 policies. The effectiveness of policy formulation and implementation was assessed by index evaluation method, and the existing problems of the policy system were also analyzed. The evaluation results showed that among the 20 policies, 70% of the policies had phased objectives, nearly 85% of the policies had been considered and adopted by provincial governments of provincial committees and commissions, 50% of the policies needed to be further improved in terms of evaluation, 50% of the existing laws needed to be adjusted to existing laws and regulations, and 60% of the relevant policies needed to be adjusted in the management system. The policy system of Lake Erhai Basin still had some problems, e.g. the policy system was not perfect, the progress of each policy was quite different, some new policies needed to be published, the assessment mechanism was not perfect enough, and the monitoring and warning management level of water environment in the basin needed to be improved. Finally, it was suggested to improve the contents and principles of policy making, improve the scientificity of policy making, speed up introduction of the new policies of ecological civilization, further adjust the existing laws and regulations, perfect the assessment mechanism, and promote the monitoring and early warning capability and management level of the basin.