Based on the basic principle of the HBV conceptual hydrological model, a hydrological model of the mountainous watersheds in the arid inland area of northwest China was developed by the authors. This model reflects the characteristics of the runoff generation in the mountainous watersheds of west China. The model simulates the runoff formation and transformation processes of the mountainous watersheds by dividing the watersheds into two basic altitude zones, the high mountain ice and snow zone and the mountain vegetation zone.  Taking the monthly air temperature and precipitation of the standard meteorological stations as the foremost inputs to the model, the monthly runoff from the mountainous watersheds is then simulated. The model is applied to simulate the water balance of a mountainous watershed of the Heihe River basin at the north flank of the Qilian mountains, and the annual runoff and its monthly distribution is then forecasted. The results indicate that, from the dry years to the we years, all of the precipitation, evaporation, runoff and runoff coefficient increase, but the alimentation proportion of glacial meltwater and snow meltwater to the total runoff decrease. Therefore, the ice and snow meltwater plays a regulation function for the runoff. In the mountainous watershed of the Heihe River, the runoff coefficient is much larger than that of the whole arid area, but it is still less than the average value over the whole country. The model of runoff simulation and forecast for the inland mountainous watersheds applied in the present study shows rather good fitness in the forecast of the annual runoff and its monthly distribution. Therefore, the model can be used for the runoff forecast of the mountainous watersheds both of the Heihe River and other inland rivers of the arid area of northwest China. And this will serve the rational allocation, utilization and exploitation of water resources in the middle and down courses of the inland river basins.