Water resources are precious for human survival, ecological sustainability, environmental maintenance and for economic development. Understanding the status and efficiency of water resource utilization is crucial for the effective water resources management. Variable Fuzzy Set Method (VFSM) was used in this research to conduct a water resources utilization efficiency assessment; the case study was from the Yinchuan Plain, in northwestern China. The VFSM study found that the Yinchuan Plain water utilization efficiency (WUE) was poor level in 2000, and at a medium level in 2011; these findings were consistent with the actual ground conditions. The study concludes that VFSM is a useful tool for analyzing complex and comprehensive water resource problems, and that various influencing factors can be considered in the assessment system.