Water scarcity has been a critical factor that restricts the Yellow River Basin’s economic development for decades. Balancing water resources and industrial development is a core strategy for the sustainable water management in the Yellow River Basin; it is also crucial for promoting the synergistic development of society, economy, and environment and for realizing ecological protection and high-quality development of the basin. This study first analyzes the evolution of the “balancing water resources and industrial development” concept and distinguishes the relationship between the concept and water management. Based on the social-economic-natural complex ecosystem theory, we propose a conceptual framework and an implementation roadmap for promoting sustainable water management in the basin. Moreover, we analyze the evolution and the status of the water management system in the Yellow River Basin by reviewing the basin’s water governance strategies and management systems. Accordingly, three major challenges in balancing water resources and industrial development in the basin are identified, including planning and coordination of administrative mechanisms, efficiency optimization of human‒water interaction, and improvement of data-driven policy-making. Furthermore, we propose several suggestions including strengthening intersectoral coordination in the basin, encouraging participation of multiple social entities to improve the basin governance network, and promoting administrative departments to co-build and share data resources to realize refined and sustainable water management of the basin.