Abstract: The Yellow River, the largest river in the North of China, is the first river to implement a water allocation scheme. The Yellow River water allocation scheme, or Scheme 1987 in short, was approved in 1987 by the State Council, which was the very first whole basin level water allocation scheme in China.It allocates a total volume of 58 billion m3 of water to the 11 provinces along the river and its ecosystem, and lays the foundation of integrated water regulation of the Yellow River. The authors have investigated the historical background for the establishment of Scheme 1987 and analyzed the processes and dynamics of the development of this scheme using a multiple stream model. Based on this, it drew some valuable experience and guidance from Scheme 1987 to the development of water right system and the reform of water resources management system for other basins. Recommendations for improvement of the scheme were put forward. It is found that Scheme 1987 is scientifically sound and visionary and it enables the Yellow River water resources to be allocated efficiently and fairly among all of the water demanding regions. Generally, severe shortage of water resources inspires a strong demand for water allocation, and a reasonable allocation scheme with a feasible implementation mechanism provide a necessary basis in the case of such severe shortage. During the long-term and repeating consultation process in drafting the allocation scheme, the impartial and authoritative decisions from government become a major contributing factor to the scheme formulation. The historical development of Scheme 1987 also reveals that only by coupling three independent streams, i.e. problem stream, political stream and policy stream, can the implementation of the Yellow River water allocation scheme be most effective.