This study designs a multipurpose urban shallow artificial lake, including water supply, flood detention, and water environment preservation. It is expected to not only preserve a healthy water environment but to also retain water conservation and flood detention. This study adopts system dynamics (SD) to analyze the relationship between different purposes of water resources utilization. Furthermore, different operation strategies effects can be simulated by SD through a proposed urban multipurpose shallow artificial lake system. The results demonstrate the dynamic effects of strategies managers propose such as demand analysis, inflow control, and water quality improvement in this case study for Taiwan. SD aids lake system prediction and understanding temporally in sequential planning for water supply, environmental preservation, and flood detention. The SD model will hopefully serve as a reference to study different features before artificial lakes constructing.