Water has become a key restricting factor of the urbanization process in developing arid areas. Based on qualitative and quantitative methods, we constructed an integrated indicator system to assess the status of water resources and urbanization system in arid area, and established an AHP model reformed by entropy technology to evaluate the temporal and spatial variations of water resources constraint intensity on urbanization. This model is applied to the Hexi Corridor, a typical arid area in NW China. Results show that, water resources constraint intensity on urbanization in the Hexi Corridor is bigger in the east and smaller in the west. It has changed from the less strong constraint type into the strong constraint type from 1985 to 2005, yet it decreased appreciably in recent years. At present, most areas in the Hexi Corridor belong to the less strong or strong constraint type. Through rational adjustment of water resources and urbanization system, the Hexi Corridor can still promote water resources sustainable utilization and accelerate the urbanization process. This study suggests that the integrated assessment model of water resources constraint intensity on urbanization is an effective method to analyze the conflicts between water resources and urbanization system in arid area.