Under the guide of system theory, taking the oasis in the Sangong River watershed as a case study, this paper analyzes the oasis structure and function from 4 aspects including oasis spatial structure, water resources structure,vegetation structure, economic structure and their corresponding functions. The results indicate that as a typical small-scale watershed, Sangong River watershed has the relatively complete mountain-basin structure, and ecological and productive function. Because of human drastic activity the utilization rate of water resources was as high as 98.7%,and the utilization of groundwater was not reasonable, which resulted in an average annual decline of 0.353m in the water table of alluvial-diluvial-fan oasis, and an average annual increase of 0.047m in the alluvial-plain. The layout of crop and shelter forest benefits to the utilization of water and land resources. The development of oasis economy is at low level, and its eco-economic function is weak.