The increasing shortage in water resources is a key factor affecting sustainable socio-economic development in the arid region of Northwest China (ARNC). Water shortages also affect the stability of the region’s oasis ecosystem. This paper summarizes the hydrological processes and water cycle of inland river basins in the ARNC, focusing on the following aspects: the spatial-temporal features of water resources (including air water vapor resources, runoff, and glacial meltwater) and their driving forces; the characteristics of streamflow composition in the inland river basins; the characteristics and main controlling factors of baseflow in the inland rivers; and anticipated future changes in hydrological processes and water resources. The results indicate that: (1) although the runoff in most inland rivers in the ARNC showed a significant increasing trend, both the glaciated area and glacial ice reserves have been reduced in the mountains; (2) snow melt and glacier melt are extremely important hydrological processes in the ARNC, especially in the Kunlun and Tianshan mountains; (3) baseflow in the inland rivers of the ARNC is the result of climate change and human activities, with the main driving factors being the reduction in forest area and the over-exploitation and utilization of groundwater in the river basins; and (4) the contradictions among water resources, ecology and economy will further increase in the future. The findings of this study might also help strengthen the ecological, economic and social sustainable development in the study region.