In this study, we discuss an optimal water environmental policy to analyze the effect of integrated river basin management with residents' evaluation of water quality of Lake Kasumigaura through a dynamic system simulation analysis. It is involved that residents' willingness to pay for improvement of lake water quality, in case of donation. We assume that the association of river basin management is established to utilize the fund efficiently for subsidies of household wastewater disposal equipments and so on. We build a lake water estimation model and simulate the near future situation of the lake water quality, linked by socio-economic, ecological and water cycle model in the catchment area of Lake Kasumigaura. It can be evaluated that the effectiveness of integrated river basin management system and residents' payment for policy measure by comparing some cases, and also obtained actual information as a practical guide to make a decision for the water environmental policy in the future.